On March 18, Finance Minister Bill Morneau annouced that the federal government would be reducing the minimum withdrawal rate for registered retirement income funds (RRIFs) by 25% for 2020. The measure was part of an $82-billion relief package announced by the government in response to the economic impact of the COVID-19 virus.
In regards to reducing your minimum RRIF payment - you have a choice.The reduction will not be processed automatically and you will have to request the 25% reduction be applied to you. Please call us if you would like to take advantage or the reduction.
The reduced minimum for this year will not affect the withholding tax rules. In other words, if you decide to receive the regular minimum amount, you will not be subject to withholding tax. If you withdraw more than the regular (unreduced) minimum amount, you will be subject to withholding tax on the portion that is above the regular (unreduced) minimum amount.
If you have already taken your full minimum payment for 2020, unfortunately your payment will have to remain as is. At this time, there is no opportunity to return the funds or "re-contribute".
You will not automatically receive a receive a new RRIF evaluation letter, informing you of the reduced minimum. Please call us directly and we can help you understand what it would look like for your particular situation.