Should the top-up to MA be done on 1st Jan or 31st Jan? I seem to have read that in either case, the interest gained will be the same since CPF only computes interest based on the balance at the end of that month.
You only need to beat the compulsory contribution timing. For example, if your employer processes CPF contributions so that they hit approximately on the 10th day of the following month, try making your MA Voluntary Contribution via PayNow QR on January 8.
So now I can top up my wife and son's MA and get tax relief? Sound like a good deal.
Wife if she has very limited income or is handicapped. A child is not an eligible family member recipient for tax relief.
Been reading this thread and CPF website, still a bit confused - appreciate if anyone can clarify:
My situation:
1. Annual contributions from employer+self are at the max (~37k).
2.Have not yet reached FRS overall
3. Have not yet reached BHS overall
What I currently do (old rules):
4. Top-up 7k/yr into SA (maximise tax relief)
I don’t contribute anything to family members CPF , or receive contributions from anyone - spouse could be an option, but as she earns income there is no tax relief; neither of us have parents or siblings entolled in CPF.
Under new rules - tell me if I’ve got this right…
5. I can increase my top up to 8k/yr (yay!)
Yes.
6. Unclear…do I now have the option of putting this top-up into MA instead of SA? Or does constraint #1 still prevent this?
You will now have the option to split the $8,000 any way you wish between MA and SA. You can put all $8,000 into MA, all $8,000 into SA, or anything in between. Starting January 1, 2022, the CPF Annual Limit will no longer apply to Voluntary Contributions to MA. (The CPF Annual Limit already does not apply to SA top ups.)
$8,000 is only the tax relief limit. You can deposit more dollars if you wish, up to the BHS (MA) and FRS (SA).
I think you can only do a top up of max 8K to your MA a/c and also get a tax relief on that. You won't be able to top up your SA a/c with cash because the AL still applies in this case. But you can do a OA to SA transfer to hit the FRS asap if that is one of your goals too.
No, that's not correct. The CPF Annual Limit does not apply to SA top ups.
Now parents can have tax relief by topping up kids’ CPF SA/MA accounts. Great news for parents, long overdue.
No, that's not correct. Children (and nieces, nephews, grandchildren, etc.) are not eligible family members for tax relief purposes. IRAS provides that list
here. Some qualifying family members (spouses for example) are subject to conditions. There is no announcement about any change to this list, so you can assume that there's no tax relief for you when you deposit funds in your child's MA.
However, if you hand dollars to your child who then deposits those dollars in his/her MA, your child may qualify for his/her own tax relief. Tax relief isn't common for minor children unless your child happens to have a successful modeling career, for example.
