PHSPs – Tis the Season « HSA Information for Canadians

The holidays may be over for many of us, but Private Health Services Plan (PHSP) season has just begun. Since PHSP contributions are declared on your annual personal taxes to Canada Revenue Agency, they are accounted for on an annual basis. The earlier in the year you start making contributions, the better off you are by year end.

For Example:

If you are a self-employed professional with a spouse or dependent over 18 years of age, the annual allowance for you to deposit into a PHSP would be 2 x $1500 or $3,000 in total. However, this is assuming that you started the plan in January. If you started the plan in July, you would only be allowed to claim for 6 months worth of contributions, or half of the $3,000 you deposited into the PHSP. You could still deposit the $3,000, but would only receive the tax relief of 6 months worth of access.

If you are an unincorporated sole-proprietor in Canada considering the idea of opening a Private Health Services Plan in 2008, now is the time to do so.