Reference from: Fundamentals of Income Tax Case Study 2019

?Question 3 (4 points) Who should report the $2,000 Jeremy had taken out of the RRSP that Sonja had contributed? And who can claim the withholding tax on the T4RSP? Explain why. 

 

It is the role of a financial institution to prepare, issue and report any financial transaction carried out at a given time.

Sonja is the one to claim the withholding tax on the T4RSP.

Step-by-step explanation

A Canadian T4RSP tax slip is mandated with the role of preparing, issuing and reporting to its members as well as the Canada Revenue Agency (CRA) how much money has been withdrawn from or even received out of one's Registered Retirement Saving Plan, normally for a given tax year.

Moreover, this T4RSP tax slip continues to show amount withdrawn from a Registered Retirement Savings Plan (RRSP) under the Home Buyers Plan or under the Lifelong Learning Plan. In addition to this, it also captures the money transferred from a Registered Retirement Savings Plan (RRSP) to a spouse or partner under the orders made by a court or any written agreement in a marriage. All this t

It is Sonja who's going to claim the withholding tax on the T4RSP mainly because he is the one solely contributing towards the Registered Retirements Savings Plan. According to Canada T4RSP form, Sonja is considered the administrator, thus has to fill the T4RSP form indicating the amount withdrawn as well as the income tax that's to be paid.