CPF Top up questions

[reddevil0728]

when you find out please share. thanks!

 

[kks_ng_id]

Found out the problem. CPF said that I never ticked 'the checkbox' to declare my wife income less than $4,000, so the CPF top up didn't get submitted to IRAS. I even could not remember that.

No point arguing about that thing, the officer helped me make a new declaration and said that it would take 2 to 3 weeks for rectification (need to take so long? ) and after that CPF will send the revised information to IRAS and IRAS will do the amendment of assessment. No choice, still need to pay first before amendment takes effect.

 

[BBCWatcher]

No point arguing about that thing, the officer helped me make a new declaration and said that it would take 2 to 3 weeks for rectification (need to take so long? ) and after that CPF will send the revised information to IRAS and IRAS will do the amendment of assessment. No choice, still need to pay first before amendment takes effect.

You may be able to apply for deferred, interest free tax payment due to the COVID-19 situation. Details here.

 

[kks_ng_id]

Thanks for the advise. The deferment is only for those due before 31 Jul 2020. Mine is due in Aug 2020.

 

[BBCWatcher]

Thanks for the advise. The deferment is only for those due before 31 Jul 2020. Mine is due in Aug 2020.

IRAS's Web site is confusing, but here's the simple version: if you're on a GIRO payment plan then all you need to do is to cancel your current plan then immediately apply for a new one. IRAS should then recalculate and stretch out your payments more or less automatically. Give that a try if you'd like.

 

[kks_ng_id]

Thanks. Will look into it

 

[Opps-gal]

Non tax paying people can topup own Mediasave (Tax-deductible) account?

Will this mediasave topup affect tax relief for spouse, if spouse top up spouse account to get tax relief each year?

 

[reddevil0728]

Non tax paying people can topup own Mediasave (Tax-deductible) account?

Will this mediasave topup affect tax relief for spouse, if spouse top up spouse account to get tax relief each year?

If you are non tax paying, then what use is there for tax relief???

 

[giraffey]

Non tax paying people can topup own Mediasave (Tax-deductible) account?

Will this mediasave topup affect tax relief for spouse, if spouse top up spouse account to get tax relief each year?

Yes, you can still top up voluntary to medisave, all 3 accounts or SA/RA. Tax Deductible simply means you can claim for tax relief during income tax filing.

The tax relief is only applicable to the payer and not the recipient. So, by topping up to spouse/parent/etc, it does not affect their tax relief benefits.

 

[BBCWatcher]

Non tax paying people can topup own Mediasave (Tax-deductible) account?

Will this mediasave topup affect tax relief for spouse, if spouse top up spouse account to get tax relief each year?

Yes, you can still top up voluntary to medisave, all 3 accounts or SA/RA. Tax Deductible simply means you can claim for tax relief during income tax filing.

The tax relief is only applicable to the payer and not the recipient. So, by topping up to spouse/parent/etc, it does not affect their tax relief benefits.

That's not quite right. Let's review the CPF cash top up choices. I'm numbering these for reference, but there's no particular significance to the numbering. I'm not including transfer options in this particular list.

1. MediSave only. These top ups must fit within the recipient's Basic Healthcare Sum ($60,000 in 2020, less for those who celebrated their 65th birthdays prior to 2020) and CPF Annual Limit (currently $37,740). The recipient qualifies for tax relief on the full amount, unless of course there's no or limited tax relief to be enjoyed due to either being in the zero percent tax bracket or hitting the $80,000 annual tax relief limit. (Technically the Income Tax Act indicates that the giver and recipient must be the same person for tax relief, but in practice it seems like the giver can be a different person.)

2. Special Account only. These top ups must be made before the recipient's 55th birthday and must fit within the recipient's Full Retirement Sum ($181,000 in 2020). The giver may be eligible for up to $7,000 of tax relief per year if the recipient is a qualified family member or self. (Up to $14,000 per year is possible with a $7,000 self top up plus $7,000 to one qualified family member or split among qualified family members.)

3. Retirement Account only. These top ups can be made on or after the recipient's 55th birthday and must fit within the recipient's Enhanced Retirement Sum ($271,500 in 2020). For purposes of calculating the ERS limit only principal counts, not interest, so it's possible to make repeat ERS top ups every time the ERS is raised. Tax relief rules are similar to #2 but only when the recipient's Retirement Account is below the Full Retirement Sum.

4. "All three account" Voluntary Contribution (VC). VCs must fit within the recipient's CPF Annual Limit. The funds will be allocated into the recipient's accounts per standard allocation rules for the recipient's age. Only self-employed individuals are eligible for tax relief with VCs.

5. Repayment of Ordinary Account funds. A recipient who has used OA funds (for housing, notably) can repay the funds, plus accrued interest, in any partial or full amount at any time. These repayments are not eligible for tax relief.

6. There's also a weird, exceptional situation involving MediSave deductions that are reimbursed in cash. If you used MediSave to pay for medical care, then you filed a claim with your insurer or employer, then you received any cash reimbursement, you are required to reimburse your own MediSave account. Instructions on how to do that are available here. This situation sometimes happens when there's a non-local employer or insurance carrier involved. These MediSave reimbursements do not need to fit within the Basic Healthcare Sum or CPF Annual Limit, and they are not eligible for tax relief.

Those are the 6 available ways to inject cash into one or more CPF accounts, and the 6th one is pretty exotic. Did I miss any?

 

[Extech]

That's not quite right. Let's review the CPF cash top up choices. I'm numbering these for reference, but there's no particular significance to the numbering. I'm not including transfer options in this particular list.

1. MediSave only. These top ups must fit within the recipient's Basic Healthcare Sum ($60,000 in 2020, less for those who celebrated their 65th birthdays prior to 2020) and CPF Annual Limit (currently $37,740). The recipient qualifies for tax relief on the full amount, unless of course there's no or limited tax relief to be enjoyed due to either being in the zero percent tax bracket or hitting the $80,000 annual tax relief limit. (Technically the Income Tax Act indicates that the giver and recipient must be the same person for tax relief, but in practice it seems like the giver can be a different person.)

2. Special Account only. These top ups must be made before the recipient's 55th birthday and must fit within the recipient's Full Retirement Sum ($181,000 in 2020). The giver may be eligible for up to $7,000 of tax relief per year if the recipient is a qualified family member or self. (Up to $14,000 per year is possible with a $7,000 self top up plus $7,000 to one qualified family member or split among qualified family members.)

3. Retirement Account only. These top ups can be made on or after the recipient's 55th birthday and must fit within the recipient's Enhanced Retirement Sum ($271,500 in 2020). For purposes of calculating the ERS limit only principal counts, not interest, so it's possible to make repeat ERS top ups every time the ERS is raised. Tax relief rules are similar to #2 but only when the recipient's Retirement Account is below the Full Retirement Sum.

4. "All three account" Voluntary Contribution (VC). VCs must fit within the recipient's CPF Annual Limit. The funds will be allocated into the recipient's accounts per standard allocation rules for the recipient's age. Only self-employed individuals are eligible for tax relief with VCs.

5. Repayment of Ordinary Account funds. A recipient who has used OA funds (for housing, notably) can repay the funds, plus accrued interest, in any partial or full amount at any time. These repayments are not eligible for tax relief.

6. There's also a weird, exceptional situation involving MediSave deductions that are reimbursed in cash. If you used MediSave to pay for medical care, then you filed a claim with your insurer or employer, then you received any cash reimbursement, you are required to reimburse your own MediSave account. Instructions on how to do that are available here. This situation sometimes happens when there's a non-local employer or insurance carrier involved. These MediSave reimbursements do not need to fit within the Basic Healthcare Sum or CPF Annual Limit, and they are not eligible for tax relief.

Those are the 6 available ways to inject cash into one or more CPF accounts, and the 6th one is pretty exotic. Did I miss any?

For VC, do you know what happens if you do VC when your MA has reached the Basic Healthcare Sum?

 

[dork32]

For VC, do you know what happens if you do VC when your MA has reached the Basic Healthcare Sum?

overflow sa

 

[BBCWatcher]

For VC, do you know what happens if you do VC when your MA has reached the Basic Healthcare Sum?

overflow sa

Yes. However, if your Special Account is at or above the Full Retirement Sum, the MA portion of your VC "double spills over" into your Ordinary Account.

The portions of your VC allocated to OA and SA flow into those accounts and don't "spill over." It's only the MA portion that shifts to another account when the MA is at or above the Basic Healthcare Sum.

 

[Project_Xco]

next year if i want to chiong my SA, the maximum cash top up i can do is $37,740 minus all my CPF contributions (incl employer contributions) for that year?

 

[BBCWatcher]

next year if i want to chiong my SA, the maximum cash top up i can do is $37,740 minus all my CPF contributions (incl employer contributions) for that year?

No. There are only two SA top up limits: age (it must be before your 55th birthday) and the current Full Retirement Sum ($181,000 in 2020). You can deposit $181,000 in one go into a newborn Singaporean's Special Account if you like.

Tax relief limits apply, but the tax relief limits are separate from the top up limits.

 

[Project_Xco]

No. There are only two SA top up limits: age (it must be before your 55th birthday) and the current Full Retirement Sum ($181,000 in 2020). You can deposit $181,000 in one go into a newborn Singaporean's Special Account if you like.

Tax relief limits apply, but the tax relief limits are separate from the top up limits.

Oh, thank you. I must have been confused it with the CPF Annual Limits.

I understand the tax relief limit is $7k for self.

 

[Opps-gal]

Just want to confirm if top up own MA, will this affect future top up by spouse (giver) for the tax deduct up to $7K?

MA account using up for the coverage.

 

[sunbox]

Hi BBCW,

Do we get tax relief from 7k top up of SA assuming that once SA is already at 181k?

No. There are only two SA top up limits: age (it must be before your 55th birthday) and the current Full Retirement Sum ($181,000 in 2020). You can deposit $181,000 in one go into a newborn Singaporean's Special Account if you like.

Tax relief limits apply, but the tax relief limits are separate from the top up limits.

 

[reddevil0728]

Just want to confirm if top up own MA, will this affect future top up by spouse (giver) for the tax deduct up to $7K?

MA account using up for the coverage.

If you max out ur MA and max out ur SA at FRS. anything above no tax relief

 

[reddevil0728]

Hi BBCW,

Do we get tax relief from 7k top up of SA assuming that once SA is already at 181k?

Look under “Limit on Cash Top-Up Amount for Computing Tax Relief“
https://www.iras.gov.sg/IRASHome/Individuals/Locals/Working-Out-Your-Taxes/Deductions-for-Individuals/CPF-Cash-Top-up-Relief/

Such info can be found on IRAS/CPF website