HBP repayment and tax refund

[armtamz]

Hello there,

I am a bit confused.

I have been paying back my HBP every year for three years, and every time I enter a designated amount for this from my RRSP, it has always lowered my tax refund.

Fast forward to this year. I contributed X amount to my RRSP, and Turbotax shows a tax return amount of Y. However, when I then enter the designated amount to my HBP, that tax return amount of Y does not decrease.

Am I missing something? Do we now get the RRSP tax credit even on the amount we designate to HBP?

Thanks in advance

[TurboTaxGinette]

It sounds like the repayment was not included in the past years and the amount of the missing payment was put in line 12900 as it is meant to happen. This would raise your taxes due, therefore lowering your refund. As seen in our TurboTax article: Understanding Your Home Buyers’ Plan  if you fail to make a contribution in any year, it doesn’t increase the future payments’ amounts. The missing payment will be added to line 12900 of your income tax return as an RRSP income. Then, future payments will not be changed. You may wish to review your past returns and see if the Canada Revenue Agency Notice of Assessments indicate an amount in line 12900. When an HBP payment is made the RRSP contribution used as payment amount is not counted as a deduction/tax credit. Please see the images and directions below showing how to enter your Home Buyers' Plan payment.

If using our TurboTax Online or Easy Steps in our Desktop software, please go to the Find Icon (magnifying glass) to enter Home Buyers' Plan, select it then Go. This will bring you to the screen seen in the image below. See the entries to be filled on the next Home Buyers' Plan as seen in the next image below. Then you will follow the steps in the last image to view your payment on the RRSP Summary screen.