Understanding the tax implications of investments

• Year of contribution: Your contributions in the year can be used to reduce your taxable income or carried forward to subsequent years.
• While amounts remain in the plan: Investment income accumulated during the period remains in the plan and is generally tax-exempt.
• Year of withdrawal: The amount withdrawn must be included in your income for that year.

If you have an RRSP, a PRPP or a VRSP and make a withdrawal, you will generally receive one of the slips below, which will provide the information needed to complete your income tax return.

• Relevé 2 - Revenus de retraite et rentes (retirement and annuity income)
• Relevé 16 - Revenus de fiducie (trust income)

• Year of contribution: Your contributions in the year cannot be used to reduce your taxable income.
• While amounts remain in the account: Investment income accumulated during the period remains in the account and is generally tax-exempt.
• Year of withdrawal: Withdrawals are tax-exempt, which means they do not need to be included in your income tax return.

You generally do not need to report information about your TFSA on your income tax return. 

• Year of contribution: Your contributions in the year can be used to reduce your taxable income or carried forward to subsequent years.
• While amounts remain in the account: Investment income accumulated during the period remains in the account and is generally tax-exempt.
• Year of withdrawal: The amount withdrawn is tax-exempt if it meets the conditions related to purchasing a first home. Otherwise, it must be included in your income for the year. 

If you have an FHSA and make a contribution or withdrawal, you will generally receive an RL-32 slip providing the information needed to complete your income tax return.

• Year of contribution: Government grants top up contributions.
• While amounts remain in the plan: Investment income accumulated during the period remains in the account and is generally tax-exempt.
• Year of withdrawal: If the student pursues qualifying post-secondary studies, the withdrawal amounts are divided. The total contribution is repaid to the subscriber and is tax-exempt. The total grants and earnings are paid to the student and must be included in their income tax return.

Note:  If the child does not pursue studies, the RESP can sometimes be transferred to another eligible child. Otherwise, the total grant is generally repaid to the government, the total contribution is repaid to the subscriber and the total earnings may be taxable.  

For more information, see Québec education savings inventive (QESI).

If you have an RESP and you make a withdrawal, you will generally receive an RL-1 slip providing the information needed to complete your income tax return.