Is there a $2,000 buffer on an FHSA?
No. Every dollar past your FHSA room is taxed at 1% a month: $250 over a year’s $8,000 is $2.50 a month.
FHSA over the limit
$250
See how
Room this year$8,000
Contributed$8,250
Over$250
1% a month$2.50
The $2,000 allowance is the RRSP’s alone. On an FHSA the tax runs from the first dollar over, on the highest excess in each month.
To remove an excess, a withdrawal is designated as one on form RC727; the tax is reported on form RC728.
It stops the month after the excess is gone, or once next year’s new room covers it.
Sources
Checked against the CRA’s pages on .