A major change to your Fonds savings as of 2024
In its 2023–2024 budget, the Québec government has introduced a measure that could affect your eligibility for the 30% tax credit for a labour-sponsored fund in 2024. This measure is designed to ensure that workers with greater savings needs can aspire to a decent retirement.
To qualify for the 30% tax credit in 2024, your taxable income in 2022 must be $112,655 or less. Taxable income is line 299 of your Québec income tax return.
Two tax years in advance
To help you plan ahead, your eligibility is determined two tax years in advance (e.g., in 2022 for 2024).
Taxable income threshold
The taxable income threshold will change every year. For your 2025 contributions, the 2023 threshold will increase from $112,655 to $119,910.
Federal and provincial
If your taxable income exceeds the prescribed threshold, you won't be eligible for any labour-sponsored fund tax credits for that tax year, either federally (15%) or provincially (15%).
Use this step-by-step guide in our FAQ section to help determine whether you're eligible for tax credits.
Don't get caught unawares. If you're no longer eligible for the labour-sponsored fund tax credit and continue to make RRSP+ or non-RRSP+ contributions via payroll deduction, it's your responsibility to ask your employer's payroll department to halt immediate tax deductions (in other words, to ensure you stop receiving the 30% tax credit directly on your paycheque).
Three concrete examples
Deductions that reduce your taxable income
Your employment income is $120,000 per year. Thanks to your $10,000 in RRSP contributions and other worker deductions, your taxable income on line 299 is $105,000. That means you're eligible to receive the labour-sponsored fund tax credit for the 2024 tax year!
Sources of income outside your salary
Your employment income is $90,000. However, due to the rental income from your second home, your taxable income on line 299 is $118,000. Unfortunately, that makes you ineligible to receive the tax credit for the 2024 tax year.
Maximize contributions in the first 60 days of the year
Your taxable income on line 299 exceeds the maximum and you find that you will no longer have access to the credits in 2024. You are still able to keep your contributions for the months of January and February (first 60 days of the year) and claim all tax credits on your 2023 tax return.
What to do if you no longer qualify for the labour-sponsored fund tax credit
Can I continue to contribute to my RRSP+ with the Fonds?
If your annual salary is higher than the prescribed taxable income threshold, you'll still be able to make contributions, but you won't receive the labour-sponsored fund tax credit. Depending on your tax situation, you may still benefit from standard RRSP deductions.
What will happen to my existing savings?
Rest assured that the savings you've already accumulated will continue to grow in your RRSP+ to help you reach your retirement goals.
What are my other options within the Fonds family?
If you'd like to continue investing your savings in the local economy while enjoying maximum flexibility, consider FlexiFonds mutual funds, in which 70% of assets are tied to Québec businesses. Keep in mind, however, that the tax credit for a labour-sponsored fund does not apply to FlexiFonds products.
FlexiFonds mutual fund advisors put their expertise and competence at your disposal, with no pressure and no commission. They will be happy to assist you if you are affected by this change.