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Over the holiday break, I was helping a family member do some end-of-year tax planning (I know, we’re THOSE kinds of party animals) when we saw something strange on their 2024 Notice of Assessment.
“An excess FHSA amount has been identified based on your contributions and participation room. A tax of 1% per month is applicable.”
Huh? What?
The penalty wasn’t small either. It was nearly $1000.
Before we get into what happened, here’s a brief refresher on the FHSA, Canada’s newest tax-advantaged savings vehicle.
The First Home Savings Account, or FHSA, was first introduced by then-Prime Minister Justin Trudeau as part of the 2022 federal budget, with the first banks offering the FHSA to customers in Q3/Q4 of 2023.
The FHSA is an excellent tax savings vehicle. Money you contribute into it is deducted off your reported income like an RRSP, earning you a tax refund. Money you withdraw for buying or building a home can be taken out tax-free, like a TFSA. The FHSA is what would happen if the RRSP and the TFSA had a love child.
In order to qualify for opening one, the account holder must be a Canadian resident, between the age of 18 and 82, and be a first time home owner, which is defined as not living in a home owned by either you or your spouse for the preceding 4 years.
You can contribute up to $8000 per year, up to a lifetime maximum of $40,000, per person. That maximum contribution room is a flat $8000 for everyone, unlike the RRSP where the maximum contribution is dependent on your previous year’s earned income.
If you decide not to buy a house, the FHSA balance can also be transferred into your RRSP, so the FHSA can also be used to supercharge your retirement savings even if you don’t ever intend to buy a house.
In short, if you’re eligible for an FHSA, there’s no reason not to open one up since there’s no downside. If you’re planning on buying a house, great. If you’re not, then it’s extra RRSP room. Even if you don’t have $8000 handy to put in, you should still open one up because your unused contribution room (up to $8000) gets rolled over into next year.
My family member was thinking about buying a home, so in 2023 she opened up an FHSA and put in $8000. Then in 2024, she put in another $8000. We checked over her statements and made sure that these two transactions were the only deposits she made into the account.
We also logged into her CRA portal and checked the FHSA transactions that the CRA had on record. Everything looked correct.
So what happened? Did we do something wrong? Did I misunderstand how the FHSA works? Or did the CRA mess up?
Turns out the culprit was a missing form. Specifically, a form called “Schedule 15 – FHSA Contributions, Transfers and Activities.”
Never heard of it? You’re not alone. That’s because Schedule 15 is a brand new form that was created in 2023 alongside the FHSA. It’s what the CRA uses to keep track of your FHSA activity, and it’s supposed to be attached to your tax return every year that you make a contribution or withdrawal to/from your FHSA. Even if you just open an FHSA account and leave it empty, you’re still supposed to fill in a Schedule 15 and check the box labeled “Tick this box if you opened your first FHSA in 2024 or became a successor holder in 2024 and did not open another FHSA of your own in 2023 or 2024.”
This form should have been theoretically filled out for you if you used tax preparation software or an accountant, but for some reason this didn’t happen for my family member. Sure enough, when we checked her 2023 tax return, Schedule 15 was not there.
Since Schedule 15 is how the CRA knows when the FHSA was opened, they didn’t know that her account was first opened in 2023, so they didn’t know that she could contribute $8000 that year. Then when she filed her 2024 taxes, the CRA noticed that she had contributed $16,000 in total, but thought the account had been opened in 2024 rather than 2023. Therefore, they thought she had a total maximum contribution room of $8000 rather than $16,000, and therefore believed she had overcontributed by $8000.
The penalty for overcontributions is 1% of the overcontributed amount ever month, which resulted in a penalty of $8000 x 1% x 12 = $960.
To be fair, when a program is brand new, there’s bound to be growing pains. When the TFSA was first created in 2009, many people accidentally overcontributed to their accounts because they were unfamiliar with the rules. Back then, the CRA forgave interest and penalties if the overcontribution was an honest mistake. And to their credit, the CRA was very helpful this time around too.
When we called the CRA and explained the situation, the CRA representative recognized the issue, telling us that they had encountered other taxpayers that were affected by this as well.
To fix this, they told us, we needed to amend her tax returns from 2023 and 2024 with corrected Schedule 15 forms.
The most straightforward way to do this is to use your certified tax software. Log in and review your 2023 and 2024 tax returns, and double check that your T4FHSA slips were entered correctly. Then double check that a Schedule 15 is being filled out properly with the information in your T4FHSA slip and attached to your tax return. If you find the form is still missing or has incorrect information, reach out to your tax software’s help desk for assistance.
Once your return looks correct, use your tax software’s ReFILE feature to file an amended return.
You will need to wait a few weeks for the amended return to be reassessed, which will hopefully include a refund. If this doesn’t fix the problem, you may need to reach out to the CRA support desk for further assistance. Have your documents ready to go before you call, and be polite and courteous – the CRA representatives didn’t cause the problem, and they’re trying to help you.
As for my family member? I am happy to report that they got their money refunded.
Has this happened to you? Were you able to get your money back? Let’s hear it in the comments below.
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I guess this is one of the few times I’m glad I use TurboTax to file since they include the Schedule 15 when you’ve identified that you have made FHSA contributions and have the associated T4FHSA tax slip.
I stopped reading at “My family member was thinking about buying a home”. J/k, thanks for sharing this.
Is the book available in Canada?
I am happy that the CRA was helpful for you. There weren’t for me.
I thought the contribution room was accumulating when you were eligible instead of at the opening the account and put 16 000$ in 2024. (Btw even if you wait for more than two year, you can only put max 16 000$ in the FHSA. Be really aware of that!)
So saw that, had to contact the CRA, filled the form they ask me to in march 2025 and then wired the money.
Come october 2025, they send me a letter asking me for the money. Contact the CRA again. Seem that they sent me back the money when I did my tax filling.
I sent again in novembre 2025. The CRA confirmed me they received the money.
Early december 2025, another letter from the CRA asking me for the money. Contact them again, they have the money, but haven’t put it in my account toward the FHSA account penalty. It will take 11 weeks. And somehow it might bounce back again…
The CRA is completely overwhlem right now, try to not do any errors with FHSA because it could take at least nine month for the CRA to solve the issue…
The article is a helpful and clear reminder that even small paperwork oversights with the FHSA can lead to costly penalties, while Retro Bowl also showing readers exactly how to identify and fix the problem.
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This article is really helpful and detailed, it shows how easy it is to make a small mistake with FHSA rules. Just like level devil – not a troll game, it looks simple at first but actually requires careful attention at every step to avoid unexpected traps!
It’s such a relief that TurboTax handles the T4FHSA integration automatically, especially since the tax rules around those contributions can get confusing quickly. I was worried about manual entry errors, so knowing the Schedule 15 is pre-populated definitely makes the filing process feel a lot less stressful.
Dealing with unexpected financial penalties on your FHSA can be stressful, but the correction steps in this post are very helpful. While you resolve these tax issues, it is also a smart time to organize your broader legal background by reviewing your Greenville Court Records to ensure no other outstanding matters exist. Keeping a close eye on both your financial documents and public filings will give you peace of mind. Take a deep breath, follow the advice, and get your accounts back in good standing soon!
Dealing with an unexpected FHSA penalty is definitely frustrating when you are just trying to save for your first home. Sometimes these financial disputes can escalate or involve complex tax and banking regulations that require legal clarification. If you need to verify any legal judgments or precedents affecting your situation, you can quickly search through Fulton legal records to find relevant case updates. Staying proactive about both your financial and legal standing is truly the best way to resolve the issue and recover those funds.
Dealing with an unexpected FHSA penalty can be stressful, but your guide offers some excellent and practical steps to recover those funds. As you reorganize your finances, it is also highly recommended to ensure all your broader personal and legal documents are properly filed. You can conveniently review your Henry County Records to verify that your property and legal files are completely up to date. Keeping both your financial accounts and public records in order will definitely provide you with greater peace of mind moving forward.
Dealing with unexpected financial penalties can be incredibly stressful, but keeping your paperwork perfectly organized is the first step to getting them reversed. If a disagreement over these fees ever escalates to a formal dispute, you might need to consult Ingham Court Records to find relevant legal documentation or case files. Always save every piece of correspondence you receive from your financial institution to build a strong defense. Taking proactive steps now will save you a lot of time and money down the road.
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This page is a practical, money-saving guide for Canadians who’ve hit an unexpected FHSA penalty, especially DIY tax filers and young first-time home buyers. It breaks down a confusing CRA mistake—the missing Schedule 15—into a clear, actionable fix.
I just read this after helping a friend with the exact same CRA notice—the 1% monthly penalty is brutal, and the missing Schedule 15 is a sneaky trap. Thanks for spelling out the rollover and the “tick the box” step so clearly; it’s exactly the kind of detail most of us miss.
If you’re juggling FHSA contributions, RRSPs, or TFSAs and want to avoid these surprises, I’ve been using a free portfolio tracker at [MagnetPure](https://magnetpure.com/
) to keep all my tax-sheltered accounts in one view. It flags contribution limits before you exceed them, so you don’t have to wait for a Notice of Assessment to find out. Worth a look if you’re managing multiple accounts or planning a home purchase.
Thanks again for the heads-up—this could save someone $1,000.
If you’ve been hit with an FHSA penalty and feel totally blindsided—you’re not alone. This detailed, real-world guide from Millennial Revolution walks through exactly how the CRA’s missing Schedule 15 form triggered a $1,000+ penalty (even with perfect contributions!), step-by-step fixes, and how to file for relief—plus actionable tips to avoid it next year. As someone who’s navigated FHSA pitfalls firsthand, the author breaks down complex CRA rules in plain English. Highly recommended if you’re serious about keeping your first-home savings on track—and tax-advantaged.
Read the full guide here