T4040 RRSPs and Other Registered Plans for Retirement

Use this guide if you want information about Registered Pension Plans (RPPs), Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Specified Pension Plans (SPPs), and Pooled Registered Pension Plans (PRPPs). This guide has information which is not in the Income Tax and Benefit package and which you may need to fill out your income tax and benefit return.

We have included definitions of some of the terms used in this guide in the Definitions section. You may want to read this section before you start.

Definitions

This section provides a general definition of the technical terms that we use in this guide.

Advantage – an advantage is any benefit, or debt that is conditional on the existence of the RRSP or RRIF , subject to certain exceptions for normal investment activities and conventional incentive programs.

An advantage also includes any benefit that is an increase in the total Fair Market Value (FMV) of the property of the RRSP or RRIF that is reasonably attributable, to any one of the following:

An advantage also includes a registered plan strip or any benefit that is income or a capital gain that is reasonably attributable to one of the following:

For more information on advantages, see Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Annuitant – generally, an annuitant of an RRSP or a RRIF is the person for whom the plan or fund provides a retirement income. In certain circumstances, the surviving spouse or common-law partner may qualify as the annuitant when, because of the death, they becomes entitled to receive benefits out of the plan or fund.

Arm’s length – refers to a relationship or a transaction between persons who act in their separate interests.

Common-law partner – a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. They:

Note

In this definition, “12 continuous months” includes any period you were separated for less than 90 days because of a breakdown in the relationship.

Commutation payment – a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan.

Deferred profit-sharing plan (DPSP) – an employer-sponsored plan we register, in which the employer shares the profits of a business with all the employees or a designated group of employees.

Defined benefit provision – the terms of an RPP that promise a certain level of pension on retirement, based on the employee’s earnings and years of service.

Earned income – we calculate your earned income by adding your employment earnings, self-employment earnings, and certain other types of income, then subtracting specific employment expenses and business or rental losses. To calculate your earned income, see Step 2 of Chart 3.

Qualifying performance income (generally endorsement income, prize money or income from public appearances received by an amateur athlete) contributed to an amateur athlete trust (AAT), qualifies as earned income in determining the RRSP deduction contribution limit of the trust’s beneficiary.

Fair market value (FMV) – usually the highest dollar value you can get for your property in an open and unrestricted market, between a willing buyer and a willing seller who are acting independently of each other. For more information on the valuation of securities of closely-held corporations, see Information Circular IC89‑3, Policy Statement on Business Equity Valuations.

Financially dependent – if you are a child or grandchild of an annuitant, you are generally considered financially dependent on that annuitant at the time of their death if, before that person’s death, you ordinarily resided with and depended on the annuitant, and you meet one of the following conditions:

If, before the annuitant’s death, you are away from home because you were attending school, we still consider you to have resided with the annuitant.

If your net income was more than the amounts described above, we will not consider you to be financially dependent on the annuitant at the time of death, unless you can establish that you were. To do so, you or the legal representative should submit a request in writing to your tax services office explaining why we should consider you to be financially dependent on the annuitant at the time of death.

Foreign plan – a plan or arrangement maintained primarily to benefit non-residents for services they perform outside Canada.

Matured RRSP – an RRSP that is paying you retirement income.

Money purchase provision – the terms of an RPP under which the amount of your pension depends on how much you and your employer contribute to the RPP for you.

Non-arm’s length – generally refers to a relationship or transaction between persons who are related to each other. However, a non-arm’s length relationship might also exist between unrelated individuals, partnerships or corporations, depending on the circumstances.

Non-qualified investment – any property that is not a qualified investment for the RRSP or RRIF trust.

Pooled registered pension plan (PRPP) – a retirement savings plan to which you or your employer or both can contribute. Any income earned in the PRPP is usually exempt from tax as long as it remains in the plan.

Prohibited investment – this is property to which the RRSP or RRIF annuitant is closely connected, it includes:

A prohibited investment does not include a mortgage loan that is insured by the Canada Mortgage and Housing Corporation or by an approved private insurer. It also does not include certain investment funds and certain widely held investments which reflect a low risk of self-dealing. For more information see Income Tax Folio S3–F10–C2, Prohibited investments – RRSPs, RRIFs, RESPs, RDSPSs and TFSAs.

Qualified investment – An investment in properties (except real property), including money, guaranteed investment certificates, government and corporate bonds, mutual funds, and securities listed on a designated stock exchange. For more information see Income Tax Folio S3–F10–C1–, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Qualifying group plan amounts – often referred to as “mandatory group plan amounts.” They are contribution amounts that you are required to make to a PRPP or a “qualifying arrangement.” An arrangement is a qualifying arrangement if all of the following apply:

Qualifying group plan amounts do not include amounts that you could have prevented from being paid after beginning to participate in the arrangement and within 12 months before the amount was paid.

Qualifying retirement plan – for purposes of the Canada–United States tax convention, a United States qualifying retirement plan is a plan that is generally exempt from income tax in the United States and is operated primarily to provide pension or retirement benefits. Common qualifying United States retirement plans include 401(k) arrangements. For a complete list of qualifying United States retirement plans, go to Protocol Amending the Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital and see article XVIII, paragraph 10.

Registered disability savings plan (RDSP) – a trust arrangement between an individual (the holder) and a trust company in Canada (the issuer) that provides for the long-term financial security of a beneficiary who has a prolonged and severe mental or physical impairment.

Registered education savings plan (RESP) – a registered contract between an individual (the subscriber) and a person or organization (the promoter). The subscriber generally makes contributions to the RESP, which earns income, paid in the form of educational assistance payments to one or more identified beneficiaries.

Registered pension plan (RPP) – a pension plan that we have registered. Funds are contributed by an employer, or by an employer and employees, to provide a pension to employees when they retire.

Registered plan strip – the amount of a reduction in the FMV of property of the RRSP or RRIF , if the value is reduced as part of a transaction or event (or a series) for which one of the main purposes is to enable the annuitant (or non-arm’s length person) to obtain a benefit in respect of the property of the RRSP or RRIF or to obtain a benefit as a result of the reduction. Exceptions are provided for plan distributions that:

Registered retirement income fund (RRIF) – a fund you establish with a carrier and that we register. You transfer property to the carrier from an RRSP, a PRPP, an RPP, an SPP, or from another RRIF, and the carrier makes payments to you.

Registered retirement savings plan (RRSP) – a retirement savings plan that you establish, that we register, and to which you or your spouse or common-law partner contribute. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan. You generally have to pay tax when you receive payments from the plan.

RRSP contribution – the amount you pay, in cash or in kind, at the time you contribute to an RRSP . In kind contributions consist of the FMV of the property.

RRSP deduction – the amount you indicate on line 208 of your income tax and benefit return. Your RRSP deduction claim is limited by the amount of your RRSP , PRPP or SPP contributions previously made and your RRSP deduction limit.

RRSP deduction limit – the maximum amount you can deduct from contributions you made to your RRSP s or to your spouse’s or common-law partner’s RRSP for a year (excluding transfers to your RRSP s of certain types of qualifying income). The calculation is based, in part, on your earned income in the previous year. PAs, PSPAs, PARs, and your unused RRSP deduction room at the end of the previous year are also used to calculate the limit.

RRSP limit – the maximum amount of new RRSP deduction room that you can create for a year and is one of the amounts used to determine your RRSP deduction limit for that year. See Step 3 of Chart 3.

RRSP excess contributions – generally, the amount of your RRSP , PRPP , and SPP contributions that is more than your RRSP deduction limit for the year plus $2,000. If you have RRSP excess contributions, you may have to pay a tax of 1% per month on those contributions. For more information, see Tax on RRSP, PRPP, or SPP excess contributions.

Retiring allowance – also called severance pay, this is an amount you receive on or after retirement from an office or employment in recognition of long service. It can include payment for unused sick leave and amounts you receive for loss of office or employment, whether as a payment of damages or a payment under an order or judgment of a tribunal. For more information, see Chart 8.

Specified non-qualified investment income – income (excluding the dividend gross-up), or a capital gain that is reasonably attributable, directly or indirectly, to an amount that is taxable for any RRSP or RRIF of the annuitant (for example, subsequent generation income earned on non-qualified investment income or on income from a business carried on by an RRSP or RRIF ).

Specified pension plan (SPP) – a pension plan or similar arrangement that has been prescribed under the Income Tax Regulations as a “specified pension plan” for purposes of the Income Tax Act (currently the Saskatchewan Pension Plan is the only arrangement prescribed to be a specified pension plan). Many of the rules related to RRSP s also apply to SPP s.

Specified retirement arrangement – a pension plan that we do not register for income tax purposes and that is either not funded or only partly funded.

Spousal or common‑law partner RRIF – a RRIF that received amounts or transfers of property from your spousal or common-law partner RRSP ; or any of your other spousal or common-law partner RRIF s.

Spousal or common‑law partner RRSP – an RRSP that you establish to pay yourself income at maturity that you or your spouse or common-law partner contributes to. Also, an RRSP that received amounts or transfers from any of your other spousal or common-law partner RRSP s or from your spousal or common law partner RRIF .

Spouse – a person to whom you are legally married.

Swap transaction – this is any transfer of property between the RRSP or RRIF and its annuitant (or non-arm’s length person). Exceptions are provided for contributions to and distributions from the plan, purchase and sale transactions between an individual’s two plans with the same tax attributes (for example, RRSP to RRSP or RRIF) and transactions relating to insured mortgages.

For more information on swap transactions and applicable transitional rules, see Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Transitional prohibited investment benefit – this expression is relevant only if an individual held one or more prohibited investments in their RRSP or RRIF on March 23, 2011 , and continues to hold the investments in their RRSP or RRIF in the tax year. An individual’s transitional prohibited investment benefit for a tax year is the total of any income earned (excluding the dividend gross-up) and capital gains realized in the tax year on these investments, less any capital losses realized on these investments in the tax year. For this purpose, the amount of a capital gain realized is the positive difference between the FMV of the property when it is disposed of by the RRSP or RRIF , or when it ceases to be a prohibited investment (less reasonable costs of disposition, if any) and the FMV of the property on March 22, 2011. The amount of a capital loss is the negative difference.

Unmatured RRSP – generally, an RRSP that has not yet started to pay you retirement income.

Unused RRSP, PRPP, and SPP contributions – the amount of your RRSP , PRPP and SPP contributions that you could not deduct or have chosen not to deduct, and that you did not designate as an HBP or LLP repayment for any year. Use Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities, to keep track of your RRSP , PRPP and SPP contributions. This amount is carried forward to the following year and you can use it as a deduction up to your RRSP deduction limit for that year.

Unused RRSP deduction room at the end of the year – generally, your RRSP deduction limit for the year minus the amount you deducted for RRSP , PRPP and SPP contributions for that year.

If you rendered services as an employee in the United States in the year, the amount you contributed in the year to a qualifying retirement plan in the United States and deducted in your income tax and benefit return, will reduce your RRSP deduction room. For more information, see Other deductions.

Chapter 1 – RPP contributions

This chapter has information about making contributions to your RPP . Particularly, it will help you calculate the amount you can deduct for RPP contributions if you:

Current service is a period of service in the year, which is credited under your RPP by your employer. Current service contributions are amounts you contribute for that period of service.

Generally, past service refers to a period of service with an employer in an earlier year that is later credited under the defined benefit provision of your RPP . Past service contributions are amounts you contribute for that period of service. They may also include contributions you make to upgrade benefits for pensionable service you accrued in the past.

You usually make your past service contributions in a lump-sum or by instalments. Your RPP may allow you to directly transfer amounts from other registered plans to pay for the cost of the past service benefits. For more information, see Chapter 6 – Transfers to registered plans or funds and annuities.

Current service and past service contributions for 1990 or later years

On line 207 of your income tax and benefit return, you can deduct the amount shown in box 20 of your 2018 T4 slip (if there is no amount in box 74 or 75 in the “Other information” area at the bottom of the slip) or on your union dues receipt. This amount includes:

You can only deduct these contributions on your 2018 income tax and benefit return. You cannot deduct them for any other year.

An amount in box 74 or 75 in the “Other information” area of your T4 slip indicates that part or the entire amount in box 20 is for past service before 1990. For more information, see Past service contributions for 1989 or earlier years. You can view your T4 and other tax information slips online by going to My Account for Individuals.

Note

Pension benefits you earn on a past service basis for 1990 or later years may cause a PSPA . For more information, see Past service pension adjustments (PSPAs).

Past service contributions for 1989 or earlier years

Calculate the amount you can deduct for past service contributions to an RPP for 1989 or earlier years based on whether the contributions were for service while you were a contributor or for service while you were not a contributor. Chart 1will help you determine the type of past service contributions you made for 1989 or earlier years.

Past service contributions you made for 1989 or earlier years appear in boxes 20, 74, and 75 of your 2018 T4 slip, in boxes 032, 126 and 162 of your 2018 T4A slip, or on a receipt that your plan administrator issued. You can view your T4, T4A, and other tax information slips online by going to My Account for Individuals.

In some cases, you may be able to deduct for 2018 only part of the past service contributions you made. If this applies, you can carry forward the amount you cannot deduct to 2019 or later years. Future versions of this guide will help you calculate the amount you can deduct for 2019 or later years.

If, for 2018, you deduct a carry-forward of past service contributions from an earlier year, attach a statement to your income tax and benefit return giving a breakdown of the amount of contributions you claimed for service while you were a contributor and for service while you were not a contributor.

Fill out Chart 2 to calculate the amount of past service contributions you made for 1989 or earlier years that you can deduct for 2018.

Note

You can deduct a maximum of $3,500 for 2018 for past service contributions made for 1989 or earlier years for service while not a contributor. The total amount you can deduct for all years is limited to $3,500 multiplied by the number of years or part years of service you bought back.

Interest on past service contributions

If you elected after November 12, 1981 , to make past service contributions and you make them in instalments, the annual instalment interest you pay is a past service contribution. Include this amount when you calculate how much you can deduct for past service contributions for 2018 on line 207 of your income tax and benefit return.

Other deductions

Pension repayments – If an individual repays to an RPP an overpayment of an amount received from the RPP that was included in their income for the year, or a preceding year, the individual can claim a deduction equal to the overpayment amount. The repayment must be for an amount that may reasonably be considered to have been paid from the RPP in error and not as an entitlement to benefits under the RPP. The individual cannot claim a deduction for the repayment if they are already claiming a deduction for this amount as a contribution to the RPP.

In addition, the Income Tax Act allows you to deduct repayments you made to your RPP in certain circumstances based on the two following acts:

For more information, call 1-800-959-8281 .

Note

Generally, you cannot deduct contributions you made to pension plans in other countries. However, Canada has entered into income tax conventions or agreements, commonly known as tax treaties, with many countries that allow a deduction on your Canadian income tax and benefit return for some of those contributions. If you have contributed to a pension plan in another country, call the International Enquiries for Individuals and Trusts at one of the following numbers: 1-800-959-8281 (toll free within Canada and the United States), or 613-940-8495 (from outside Canada and the United States)—we accept collect calls by automated response. You may hear a beep and experience a normal connection delay.

Canada–United States commuters – A resident of Canada who works in the United States (commonly referred to as a “commuter”), and is a member of a qualifying retirement plan in the United States, can deduct their contributions to that plan on their Canadian income tax and benefit return, as long they meet certain conditions and respect certain limits.

The maximum amount that you can deduct for a year is the contributions you made in the year that are attributable to the work you performed in the year. This maximum is further limited to your RRSP deduction limit for the year after reducing that limit by any RRSP contributions that you deducted for the year.

The qualifying retirement plan contributions you deduct for the year also reduce your unused RRSP deduction room at the end of the year that is carried forward and included in your following year’s RRSP deduction limit. You can view your RRSP information online by going to My Account for Individuals or by using the MyCRA mobile app at Mobile apps.

Depending on your situation, you will have to fill out either:

These forms are available at Forms and publications.

Chart 1 – Buying back service or upgrading past service benefits for 1989 or earlier years – How do you determine if your RPP past service contribution is for service while you were a contributor or for service while you were not a contributor?

Use this chart to determine the type of period your contribution relates to. You can then use Chart 2 to calculate the amount you can deduct for that type of contribution.

Step 1: Does your past service contribution relate to any year in which you were contributing to any RPP ?

If yes, go to Step 2. See Example 1.

If no, your past service contribution is for service while not a contributor. Skip Steps 2 and 3 below and fill out Area B of Chart 2 to calculate the amount you can deduct for this contribution. See Example 2.

Example 1

Miles joined TTM Company’s RPP on February 4, 2018. This RPP allowed Miles to buy back 12 years of past service with CCD Company, a previous employer. During those 12 years (1977 to 1988), Miles contributed to CCD Company’s RPP . Miles answers yes to this question because the past service contribution that he made in 2018 relates to a period of service while he contributed to CCD Company’s RPP .

Example 2

Justin became a member of XTJ Company’s RPP in January 1990. He started working for XTJ in June 1989, but did not contribute to any RPP in 1989. In 2018, XTJ’s RPP allows Justin to buy back his 1989 service with the company for $2,500. Justin answers no to this question because he did not contribute to any RPP in 1989. Justin’s $2,500 contribution is for service while not a contributor.

Step 2: Did you make the past service contribution to the same RPP (and for the same year) that you contributed to during 1989 or an earlier year?

If yes, your past service contribution is for service while a contributor. Skip Step 3 below and fill out Area C of Chart 2 to calculate the amount you can deduct for this contribution. See Example 1.

If you answer no, go to Step 3. See Example 2.

Example 1

Vern has been employed with YYW Ltd. since 1980 and has contributed to his employer’s RPP ever since. In 2018, Vern makes a past service contribution of $8,000 to upgrade past service benefits that were previously credited under the RPP from 1980 to 1988. Vern answers yes to this question because he made the past service contribution to the same RPP that he contributed to from 1980 to 1988. Vern’s $8,000 contribution is for service while a contributor.

Example 2

Avery changed employers in May 1987 and became a member of her new employer’s RPP . She was a member of a different RPP from May 1980 until May 1987. Avery’s new employer’s RPP allowed her to buy back the past service with her previous employer. Avery bought this service in July 1987. Avery answers no to this question because she did not make the past service contribution to the same RPP that she contributed to from May 1980 to May 1987.

Step 3: Does one of the following statements apply to you?

If you answer yes to one of the above statements, your past service contribution is for service while not a contributor. Fill out Area B of Chart 2 to calculate the amount you can deduct for this contribution. See Example 1.

If you answer no to both of the above statements, your past service contribution is for service while a contributor. Fill out Area C of Chart 2 to calculate the amount you can deduct for this contribution. See Example 2

Example 1

Tracey joined DEF Company’s RPP on January 15, 1988. This RPP allowed Tracey to buy back her six years of past service with ABC Company, her previous employer. During those six years, Tracey contributed to ABC Company’s RPP . The ABC Company’s RPP had a portability arrangement. Tracey entered into a written agreement on March 1, 1988, to buy back those six years of past service. Tracey has to contribute $1,000 each year for 15 years to pay for this service. Tracey answers yes, since one of the statements applies to Tracey (she made the past service contribution under the terms of a written agreement she entered into before March 28, 1988), her $1,000 yearly contribution is for service while not a contributor.

Example 2

Martha is a member of her current employer’s RPP . She entered into an agreement on April 12, 1990 , to buy back (for $12,000) past service benefits for a period of service in 1988 and 1989 with another employer when she contributed to a different RPP . Martha answers no, since both statements don’t apply to Martha (she did not make the past service contribution before March 28, 1988 , and she did not make the past service contribution under the terms of a written agreement entered into before March 28, 1988 ), her $12,000 contribution is for service while a contributor.

Calculating your 2018 deduction for your RPP contributions

Example

Mark has been working for his employer and has participated in the company’s RPP since 1997. He had previously worked for his current employer from 1984 to 1994. The RPP would allow Mark to have that entire period of past service to be recognized as pensionable service if he chose to. In Mark’s plan, the past service is broken into periods before 1990 while he was contributor and while he was not a contributor, and for his service after 1989.

For the period of service of 1984 to 1986, Mark was not a contributor to an RPP at that time, and the plan requires that he pay his and the employer’s share to fund the past service. This amount is $12,000 .

For the period of 1987 to 1989, Mark was a contributor to the RPP at that time, and it only requires that he pay his share to fund the past service. This amount is $13,500 .

Likewise, the period from 1990 to 1994, Mark was contributing to the RPP and it only requires that he fund his portion for the past service, an amount of $18,500. The total cost to Mark for his past service request will be $44,000. The RPP would allow him to fund this past service with a cash payment or a transfer of funds or both, from another registered plan, like an RRSP .

In order to buy back his past service, Mark makes a cash payment of $44,000 in 2018. Mark will receive a T4A slip showing $44,000 in box 032 for the total past service contributions, with $25,500 reported in box 126 and 162 for the past service contributions Mark made for 1989 or earlier years.

Mark is a member of the RPP and has current (2018) service contributions of $5,000. With his past service contributions, his total contribution for service that relates to 1990 or later years is $23,500 ($18,500 + $5,000).

Mark fills out Chart 2 to calculate the amount of contributions that he can deduct from income for 2018.

Area A calculates the amount of contributions for service that relates to 1990 or later years that is deductible for 2018. The amount on line 3 is entirely deductible for 2018. For Mark this amount is $23,500.

Area B calculates the amount of contributions for service that relates to 1989 or earlier years while not a contributor that is deductible for 2018. For Mark the amount that is deductible in 2018 is $3,500. Mark will be able to claim $3,500 in each year for 2019, 2020 and 2021. The maximum total amount he can deduct for all years is limited to $3,500 multiplied by the number of years he bought back.

Area C calculates the amount of contributions for service that relates to 1989 or earlier years while a contributor that is deductible for 2018. For Mark the amount that is deductible in 2018 is $0. Once he no longer claims any deductions under Areas A and B, Mark will be able to deduct $3,500 each year until his $13,500 contribution is fully deducted.

Area D summarizes the total amount from Areas A, B and C and calculates the amount that can be deducted from income.

Chart 2 – Calculating your 2018 deduction for your RPP contributions

Area A – Fill out this area if you made current service contributions in 2018, or if you made past service contributions in 2018 for service that relates to 1990 or later years. If you do not have to fill out this area, enter “0” at Step 21.

Step 1: Enter the total of all amounts from box 20 of your 2018 T4 slips, box 032 of your 2018 T4A slips, or from your receipts for union dues that represent RPP contributions.
Mark enters $49,000.

Step 2: Enter the amount from box 74 and 75 of the “Other information” area of your T4 slip and box 126 and 162 of your T4A slip that represents past service contributions made for service that relates to 1989 or earlier years while a contributor or while not a contributor.
Mark enters $25,500.

Step 3: Subtract the result of Step 1 minus the result of Step 2.
Mark’s result is $23,500.

This is the amount of your current service and past service contributions for 1990 and later years that you deduct for 2018. Enter this amount at Step 21 of Area D.

Area B – Fill out this area if you made past service contributions for service that relates to 1989 or earlier years while not a contributor (for deceased individuals, ignore any reference to Step 7).

Step 4: Enter the total amount you contributed in 2018 or earlier years for past service contributions while not a contributor.
Mark enters $12,000.

Step 5: Enter the amount you deducted before 2018 for contributions you entered at Step 4.
Mark enters “0”.

Step 6: Subtract the result of Step 4 minus the result of Step 5.
Mark enters $12,000.

Step 7: Enter the annual deduction limit ($3,500).
Mark enters $3,500.

Step 8: Multiply the number of years Footnote 1a of service to which the contributions on Step 4 relate by the annual deduction limit Mark’s result is $10,500 (3 × $3,500).

Step 9: Enter the amount from Step 5.
Mark enters “0”.

Step 10: Subtract the result of Step 8 minus the result of Step 9.
Mark’s result is $10,500 ($10,500 – $0).

Step 11: Enter the amount from Step 6, 7, or 10, whichever is less.
Mark enters $3,500.

This is the amount of your past service contributions for 1989 and earlier years for service while not a contributor that you can deduct for 2018. Enter the amount you deduct for 2018 at Step 22 of Area D. Footnote 2a

Area C – Fill out this area if you made past service contributions for service that relates to 1989 or earlier years while a contributor (for deceased individuals, ignore any reference to steps 15 to 19).

Step 12: Enter the total amount you contributed in 2018 or earlier years for past service contributions while a contributor.
Mark enters $13,500.

Step 13: Enter the amount you deducted before 2018 for contributions you entered at Step 12.
Mark enters “0”.

Step 14: Subtract the result of Step 12 minus the result of Step 13.
Mark enters $13,500 ($13,500 – $0).

Step 15: Enter the annual deduction limit ($3,500).
Mark enters $3,500.

Step 16: Enter the amount from Step 3 in Area A that you deduct for 2018.
Mark enters $23,500.

Step 17: Enter the amount from Step 11 in Area B that you deduct for 2018.
Mark enters $3,500.

Step 18: Add the result of Step 16 plus the result of Step 17.
Mark’s result is $27,000 ($23,500 + $3,500).

Step 19: Subtract the result of Step 15 minus the result of Step 18 (if the result is negative, enter “0”).
Mark enters “0” ($3,500 – $27,500).

Step 20: Enter the amount from Step 14 or 19, whichever is less.
Mark enters “0”.

This is the amount of your past service contributions for 1989 and earlier years for service while a contributor that you can deduct for 2018. Enter the amount you deduct for 2018 at Step 23 of Area D. Footnote2a

Area D – Fill out this area to calculate the total amount you can deduct on line 207 of your 2018 income tax and benefit return.

Step 21: Enter the amount from Step 3 in Area A that you deduct for 2018 (if you did not fill out Area A, enter “0”).
Mark enters $23,500.

Step 22: Enter the amount from Step 11 in Area B that you deduct for 2018.
Mark enters $3,500.

Step 23: Enter the amount from Step 20 in Area C that you deduct for 2018.
Mark enters $ 0.

Step 24: Add the following amounts: the result of Step 21 plus the result of Step 22 plus the result of Step 23. Enter this amount on line 207 of your 2018 income tax and benefit return.

Mark enters $27,000 on line 207 of his 2018 income tax and benefit return ($23,500 + $3,500 + $0).

Footnote 1a

“Number of years” includes any portion of a calendar year. For example, if the contributions relate to service between November 1986 and February 1987, you would enter “2” as the number of years of service. Footnote 2a

There is no annual deduction limit for deceased individuals. The legal representative can choose to deduct these amounts in the year of death or the year before, or a part in each year, whichever is more beneficial.

Chapter 2 – RRSP contributions

This chapter has general information on contributing to your RRSP s or your spouse’s or common-law partner’s RRSP s, as well as information on calculating your 2018 RRSP deduction limit.

The rules we explain in this chapter apply to all RRSP s, and unless otherwise stated, SPP s (in 2010 and later years) and PRPP s.

March 1, 2019, is the deadline for contributing to an RRSP for the 2018 tax year.

Canada Savings Bonds – You can transfer your holdings of past series compound-interest Canada Savings Bonds to your RRSP s or your spouse’s or common-law partner’s RRSP s. The amount you transfer is considered a contribution to the RRSP . For more information, contact your RRSP issuer.

Self-directed RRSPs – These RRSPs allow you to control the assets and make the investment decisions yourself. This is not applicable for PRPPs and SPPs . Your financial institution can tell you if it offers self-directed RRSP s. The issuer (such as a bank, credit union, trust, or insurance company) can take care of the administrative details, including getting the plan registered, receiving the amounts you contribute, and trading securities. Securities cannot be held in your own name.

Qualified Investments – You should pay particular attention to the type of investments you choose for the plan. If you buy non-qualified investments in your RRSP or RRIF, or if qualified investments held in your RRSP or RRIF become non-qualified, there are tax implications.

The rules include a tax on the annuitant of an RRSP or a RRIF that acquires a prohibited investment.

How do you claim your RRSP deduction?

On line 208 of your income tax and benefit return, you can deduct RRSP contributions you made up to the limits we explain in the following sections.

Your RRSP issuer will give you a receipt for the amounts you contributed. If you contributed to your spouse’s or common-law partner’s RRSP , the receipt should show your name as the contributor and your spouse’s or common-law partner’s name as the annuitant. Attach the receipt(s) with your income tax and benefit return to support the amount you deducted. If you are using EFILE, show your receipts to your service provider and keep them in case we ask to see them. If you are using NETFILE, also keep your receipts in case we ask to see them. If you do not get your receipts before the filing deadline, see “What if you are missing information?” in the Income Tax and Benefit Guide for more information.

If you deduct an amount for 2018 that you contributed to an RRSP up to March 1, 2018, which you had not previously deducted, you should have filled out and sent a Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities, for these contributions, for each particular year. If you did not, you should fill out and send a copy of the appropriate Schedule 7 for each year, along with the appropriate RRSP receipts, to your tax centre, separate from your 2018 income tax and benefit return.

Age limit for contributing to an RRSP

The year you turn 71 is the last year in which you can make a contribution to your RRSP .

You can contribute to an RRSP under which your spouse or common-law partner is the annuitant until the end of the year your spouse or common-law partner turns 71.

Contributing to your RRSPs

This section will help you determine how much of your RRSP contributions you can deduct on line 208 of your 2018 income tax and benefit return.

How much can you deduct?

The amount of RRSP contributions that you can deduct for 2018 is based on your 2018 RRSP deduction limit, which appears on your latest notice of assessment or notice of reassessment, or on a T1028, Your RRSP Information for 2018.

You can also deduct amounts for certain income you transfer to your RRSP . Your RRSP deduction limit is not reduced by these amounts. For more information on transfers, see Chapter 6 – Transfers to registered plans or funds and annuities.

Any income you earn in your RRSP is usually exempt from tax for the time the funds remain in the plan. However, you cannot claim a deduction for capital losses within your RRSP .

You cannot claim a deduction for amounts you pay for administration services for an RRSP . Also, you cannot deduct brokerage fees charged to buy and dispose of securities within a trusteed RRSP .

Note

You cannot deduct the interest you paid on money you borrowed to contribute to an RRSP .

If we reassess a previous year’s income tax and benefit return, your revised 2018 RRSP deduction limit will appear on your notice of reassessment or in some cases on a T1028, Your RRSP Information for 2018. We will also send you a T1028 with a new RRSP deduction limit if your RRSP deduction limit has changed for reasons other than a reassessment of a previous year’s income tax and benefit return.

If you do not have a copy of your notice of assessment or reassessment or a T1028, you can find out the amount of your RRSP deduction limit by going to My Account, by using the MyCRA mobile app at Mobile apps or by calling our automated TIPS RRSP service. For more information, see My Account and Tax Information Phone Service (TIPS).

Note

If you are a Canadian who works in the United States, see Other deductions.

Calculating your 2018 RRSP deduction limit

Your 2018 RRSP deduction limit is shown on your latest notice of assessment, notice of reassessment we sent you after we processed your 2017 income tax and benefit return or T1028. We determined your limit from information on your 2017 and previous year’s income tax and benefit returns, and from information we keep on record. If any of that information changes, your RRSP deduction limit may also change. In most cases, we will tell you about any change to your RRSP deduction limit.

You can also find out your RRSP deduction limit by registering for My Account.

If you want to calculate your 2018 RRSP deduction limit, use Chart 3.

Note

The RRSP limit for 2018 is $26,230. However, your 2018 RRSP deduction limit may be more than $26,230 if you did not use your entire RRSP deduction limit for the years 1991 to 2017. Your unused RRSP deduction room will be carried forward to 2018. For more information, see Unused RRSP, PRPP, or SPP contributions.

Contributions you can deduct for 2018

For 2018, you can deduct contributions you made to your or your spouse’s or common‑law partner’s RRSP or SPP from January 1, 1991 to March 1, 2019. You can also deduct contributions you made to your PRPP from January 1, 2013 to March 1, 2019 (do not include your employer’s contributions). You can deduct these contributions if you did not deduct them for any other year, and if they are not more than your RRSP deduction limit for 2018. Even if you can no longer contribute to your RRSP in 2018 because of your age, you can deduct your unused RRSP contributions up to your RRSP deduction limit.

The Home Buyer’s Plan (HBP) and the Lifelong Learning Plan ( LLP) – If you participate in the HBP or LLP , you may not be able to deduct, for any year, all or part of the contributions you made to your RRSP during the 89-day period just before you withdrew an amount under either of these plans. To determine the part of the contributions you made to your RRSP that you cannot deduct, go to Home buyers’ Plan (HBP) or see Guide RC4112, Lifelong Learning Plan (LLP), or go to Lifelong Learning Plan (LLP), whichever applies.

Contributing to your spouse’s or common-law partner’s RRSP, SPP, or both

This section applies to you if you contribute to an RRSP , SPP or both for your spouse or common-law partner. Generally, the total amount you can deduct on line 208 of your 2018 income tax and benefit return for contributions you make to your spouse’s or common-law partner’s RRSP or SPP and your RRSP , PRPP or SPP cannot be more than your 2018 RRSP deduction limit.

Example

Joey’s 2018 RRSP deduction limit was $10,000. He contributed $4,000 to his RRSP , and $6,000 to his common-law partner Ghislaine’s RRSP . Joey deducted the $4,000 he contributed to his RRSP on line 208 of his 2018 income tax and benefit return. Although Joey contributed $6,000 to his common-law partner’s RRSP in 2018, he decided to only deduct $5,500 of this contribution on his 2018 income tax and benefit return. He used Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities, to keep track of his RRSP contributions. He may be able to deduct the remaining $500 ($10,000 – $9,500) on a future year’s income tax and benefit return. To find out what other options are available, see Unused RRSP, PRPP or SPP contributions.

If you cannot contribute to your RRSP , PRPP or SPP because of your age, you can still contribute to your spouse’s or common-law partner’s RRSP or SPP until the end of the year they turn 71.

Contributions made after death – No contributions can be made to a deceased individual’s RRSP , PRPP or SPP after the date of death. However, the deceased individual’s legal representative can make contributions to the surviving spouse’s or common-law partner’s RRSP or SPP in the year of death or during the first 60 days after the end of that year. Contributions made to a spouse’s or common-law partner’s RRSP or SPP can be claimed on the deceased individual’s income tax and benefit return up to that individual’s RRSP deduction limit for the year of death.

Example

Dave died in August 2018. His 2018 RRSP deduction limit is $7,000. Before he died, Dave did not contribute to either his RRSP or his wife’s RRSP for 2018. His wife Paula is 66 years of age in 2018. On Dave’s behalf, his legal representative can contribute up to $7,000 to Paula’s RRSP for 2018. The legal representative can then claim an RRSP deduction of up to $7,000 on line 208 of Dave’s 2018 final income tax and benefit return.

Note

If you contributed amounts to your spouse’s or common-law partner’s RRSP in 2016, 2017, or 2018, you may have to include in your 2018 income all or part of the amount your spouse or common-law partner withdrew in 2018 from their spousal or common-law partner RRSP . For more information, see Amounts paid from or into a spousal or common-law partner RRSP, RRIF or SPP.

The HBP and the LLP – If your spouse or common-law partner participates in the HBP or LLP , you may not be able to deduct, for any year, all or part of the contributions you made to your spouse’s or common-law partner’s RRSP during the 89-day period just before your spouse or common-law partner withdrew an amount under either of these plans. To determine the part of the contributions you made to your spouse’s or common-law partner’s RRSP that you cannot deduct, go to Home buyers’ Plan (HBP) or see Guide RC4112, Lifelong Learning Plan (LLP), or go to Lifelong Learning Plan (LLP), whichever applies.

If you have a payment arrangement contract with a financial institution to make RRSP contributions, you can use Form T1213, Request to Reduce Tax Deductions at Source, to request authorization for your employer to reduce your tax deductions at source.

Keeping track of your RRSP, PRPP, and SPP contributions – Schedule 7

If you made contributions to your RRSP , PRPP , or SPP , or your spouse’s or common-law partner’s RRSP or SPP , from March 2, 2018, to March 1, 2019, and you are not deducting the total contributions on your 2018 income tax and benefit return, attach a filled out Schedule 7 to your 2018 income tax and benefit return. If you have already filed your income tax and benefit return, fill out Schedule 7 and send it to your tax centre with your RRSP , PRPP , or SPP receipts and a note showing your name and social insurance number.

Note

Only your PRPP contributions are deductible on your income tax and benefit return. You cannot deduct any contributions made by your employer. Employer contributions must be reported separately on line 205 of the income tax and benefit return.

You may not have to fill out Schedule 7. To find out, read the information at the top of the schedule. If you do have to fill it out, you will find information below about lines 1, 2, 3, 7, 8, 14, 15 and 19 to 23 .

Line 1 – Unused RRSP or PRPP contributions

These are amounts you contributed to your own RRSP, PRPP or SPP or to an RRSP or SPP for your spouse or common‑law partner after 1990 but did not deduct on line 208 of any previous income tax and benefit return or designate as an HBP or LLP repayment. The total of these amounts is identified on the “Unused RRSP /RPPP contributions previously reported and available to deduct for 2018” line on your 2018 RRSP Deduction Limit Statement shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2018, if you showed them on a previous year’s Schedule 7.

If you do not have your notice of assessment, notice of reassessment, or T1028, you can find out if you have unused RRSP , PRPP , or SPP contributions by going to My Account for Individuals, by using the MyCRA mobile app at Mobile appsor by calling our Tax Information Phone Service (TIPS).

Notes

If there are unused RRSP , PRPP , or SPP contributions you made from March 2, 2017 to March 1, 2018, you should have filed a filled out Schedule 7 with your 2017 income tax and benefit return. If you did not, you should submit your receipts with a filled out 2017 Schedule 7, but do not include them with your income tax and benefit return for 2018.

If there are unused contributions you made from January 1, 1991 to March 1, 2017, but did not show on a Schedule 7 for 2016 or earlier, contact us.

By doing so, you will avoid having your deduction reduced or disallowed for contributions made in the first 60 days of the year or in an earlier year. If you have not already filed your RRSP receipts, submit them with your Schedule 7. If you did not receive a copy of Schedule 7 with your income tax and benefit package, you can get one by going to Forms and Publications, or by calling 1-800-959-8281 .

You may have to pay a tax if you have RRSP excess contributions. For more information, see Tax on RRSP, PRPP, or SPP excess contributions.

For information on unused PRPP contributions, see Contributions to a PRPP.

Lines 2 and 3 – Total RRSP and PRPP contributions

This total includes amounts you:

Include on these lines all contributions you made from January 1, 2019 to March 1, 2019, even if you are not deductingor designating them on your income tax and benefit return for 2018 . Otherwise, we may reduce or disallow your claim for these contributions on your income tax and benefit return for a future year.

Tax tip

You do not have to claim the full amount of your deductible RRSP , PRPP, or SPP contributions for 2018 (not including transfers). If your taxable income is expected to increase in future years, it may be more beneficial for you to claim only part of your contributions for the 2018 tax year. The contributions you do not claim for 2018 may be carried forward and claimed for future years when you may be subject to a higher tax rate.

In all cases, you must record the total contributions you made on line 2 or 3 and line 245 of your 2018 Schedule 7.

Do not include the following amounts:

Note

You cannot withdraw funds from an SPP or a PRPP under the LLP or the HBP . However, SPP and PRPP contributions can be designated as an LLP or an HBP repayment.

Lines 7 and 8 – Repayments under the HBP and the LLP

If you withdrew funds from your RRSP under the HBP before 2017, you have to make a repayment for 2018. If you withdrew funds from your RRSP under the LLP before 2017, you may have to make a repayment for 2018. In either case, your 2018 minimum required repayment is shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2018.

To make a repayment for 2018, contribute to your own RRSP , PRPP , or SPP from January 1, 2018 to March 1, 2019, and designate your contribution as a repayment on line 7 or 8 of Schedule 7. Do not include an amount you deducted or designated as a repayment on your 2017 income tax and benefit return or that was refunded to you. Do not send your repayment to us. You cannot deduct any RRSP , PRPP or SPP contribution you designate as an HBP or an LLP repayment on Schedule 7. To view your HBP or LLP information, go to My Account or go to the MyCRA mobile app at Mobile apps.

Note

If you repay less than the minimum required repayment for 2018, you have to report the difference on line 129 of your income tax and benefit return.

Line 14 – Transfers

You may have reported income on line 115, 129, or 130 of your income tax and benefit return for 2018. If you contributed certain types of this income to your own RRSP on or before March 1, 2019, you can deduct this contribution, called a transfer, in addition to any RRSP contribution you make based on your RRSP deduction limit for 2018.

For example, if you received a retiring allowance (severance pay) in 2018, you would report it on line 130 of your income tax and benefit return. You can contribute to your RRSP up to the eligible part of that income (box 66 of your T4 slips or box 47 of your T3 slips) and deduct it as a transfer. Include the amounts you transfer on lines 2 or 3 and 14 of Schedule 7.

For more information about amounts you can transfer, see Chapter 6 – Transfers to registered plans or funds and annuities.

Line 15 – RRSP or PRPP contributions you are deducting for 2018

Include on this line, amounts that you contributed to your RRSP, PRPP, or SPP, or to your spouse’s or common-law partner’s RRSP or SPP that you will be deducting on your 2018 income tax and benefit return. This amount cannot exceed the lesser of the amount at line 10 (excluding transfers), and the amount from line 13.

You can carry forward indefinitely any part of your RRSP deduction limit accumulated after 1990 that you do not use.

Your RRSP deduction limit for 2018 is shown on your latest notice of assessment, notice of reassessment, or line A of T1028, Your RRSP Information for 2018.

If you do not have your notice of assessment, notice of reassessment, or T1028, you can find out your RRSP deduction limit for 2018 by going to My Account for Individuals, by using the MyCRA mobile app at Mobile apps or by calling TIPS. For more information see My Account and Tax Information Phone Service (TIPS).

If you would like to calculate your RRSP deduction limit for 2018, use Chart 3.

Note

You may not have reported income you received in a previous year on an income tax and benefit return for that year. If reported, that income may have provided you with additional room for which you could contribute to an RRSP, PRPP or SPP in subsequent years. To ensure your RRSP deduction limit is up to date and maximized, file an income tax and benefit return for all years you have not filed and report your income.

Lines 19 to 22 – 2018 withdrawals under the HBP and the LLP

On line 19, enter the total of your HBP withdrawals for 2018 from box 27 of your T4RSP slips. Tick the box at line 20 if the address of the home you acquired with these withdrawals is the same as the address on page 1 of your income tax and benefit return.

On line 21, enter the total of your LLP withdrawals for 2018 from box 25 of your T4RSP slips. Tick the box at line 22 to designate that your spouse or common-law partner was the student for whom the funds were withdrawn. If you do not tick the box, you will be considered to be the student for LLP purposes. You can change the person you designate as the student only on the income tax and benefit return for the year you make your first withdrawal.

Line 23 – Contributions to an amateur athlete trust

On line 23, enter the qualifying performance income contributed to an amateur athletic trust in 2018.

Chart 3 – 2018 RRSP deduction limit

The line numbers in brackets refer to the line numbers on your 2017 income tax and benefit return.

Step 1 – Calculating your unused RRSP deduction room at the end of 2017

Subtract the total RRSP , PRPP and or SPP contributions, that you deducted on line 208. Do not include amounts you deducted for transfers of payments or benefits to an RRSP , or the excess amount you withdrew from your RRSP in connection with the certification of a provisional PSPA that you re-contributed to your RRSP in 2017. From your RRSP deduction limit for 2017 and the total 2017 employer PRPP contributions reported on line 205. Footnote 1b

This is your unused RRSP deduction room at the end of 2017 (this amount can be negative).

Step 2 – Calculating your 2017 earned income (include each amount only once in this step) Footnote 2b

  1. Add the total of line 101 and 104 on your income tax and benefit return.
  2. Add the following amounts from line 104: royalties for a work or invention that you authored or invented plus net research grants you received plus unemployment benefit plan payments plus wage earner protection plan payments you received.
  3. Subtract the result of Step 2(1) minus the result of Step 2(2).
  4. Add annual union, professional, or like dues (line 212) that relate to the employment earnings you reported at Step 2(1) plus employment expenses (line 229) that relate to the employment earnings you reported at Step 2(1).
  5. Subtract the result of Step 2(3) minus the result of Step 2(4) (if negative, enter “0”).
  6. Add the following amounts: (i) the result of Step 2(2) plusnet income from a business (excluding distributions from an amateur athletic trust (ATT)) you carried on alone or as an active partner (lines 135 to 143) plus (ii) disability payments you received from the Canada Pension Plan or Quebec Pension Plan (line 152) plus (iii) net rental income from real property (line 126) plus total taxable support payments you received in 2017. Also, the support payments you previously paid and deducted for the year in which you paid them but that were later repaid to you and that you included as income for 2017 (line 128) plus the qualifying performance income contributed to an ATT in 2018.
  7. Add the following amounts: (i) Current-year loss from a business you carried on alone or as an active partner (lines 135 to 143) plus (ii) Amount included in Step 2(6)(i) that represents the taxable portion of gains on the disposition of eligible capital property plus (iii) Current-year rental loss from real property (line 126) plus (iv) total deductible support payments you made in 2017, and the support payments you received and included as income for the year in which you received them that you later repaid in 2016 or the previous two years and deducted for 2017 (line 220).
  8. Subtract the result from Step 26(6) minus the result from Step 2(7).

This amount is your 2017 earned income.

Step 3 – RRSP limit for 2018

  1. Multiply the result from Step 2(8) by 18%.
  2. Enter the amount from Step 3(1) or the RRSP limit for 2018 ($26,230) whichever is less.

Step 4 – Your 2017 pension adjustment (PA)

Subtract the result from Step 3(2) minus your 2017 PA (the total from box 52 of your 2017 T4 slips and box 034 of your 2017 T4A slips). Footnote 3b If the amount is negative, enter “0”.

Step 5 – Your 2018 pension adjustment reversal (PAR)

Add the result from Step 4 plus your PAR (the total from box 2 of your 2018 T10 slips).

Step 6 – Your 2018 net past service pension adjustment (PSPA)

  1. Add your exempt PSPA for 2017 (the total from box 2 of your 2017 T215 slips) plus your certified PSPA for 2018 (line A in Part 3 of Form T1004, Applying for the Certification of a Provisional PSPA).
  2. Subtract the result from Step 6(1) minus your qualifying withdrawals for 2018 (Part 3 of Form T1006, Designating an RRSP Withdrawal as a Qualifying Withdrawal) (the result can be negative).

This amount is your 2018 net PSPA .

Step 7 – Your 2018 RRSP deduction limit

  1. Add your 2017 unused RRSP deduction room from Step 1 plus the result from Step 5.
  2. Subtract the result of Step 7(1) minus the result of Step 6(2) (if negative, enter “0”).

This amount is your 2018 RRSP deduction limit.

Step 8 – Your 2018 unused RRSP deduction room

  1. Subtract the result from Step 7(1) minus your 2018 net PSPA from Step 6(2) (the result can be negative).
  2. Subtract the result from Step 8(1) minus the RRSP , SPP and/or PRPP contributions, including employer PRPP contributions (cannot be more than the amount at Step 9(2)). Do not include amounts that you deduct for transfers of payments or benefits to an RRSP ; or for the excess amount you withdrew from your RRSP in connection with the certification of a provisional PSPA that you re-contributed to your RRSP in 2018 (this amount can be negative).

This amount is your 2018 unused RRSP deduction room that you can carry forward to 2019.

Footnote 1b

If you had a net PSPA in 2017 or a previous year and your 2017 RRSP deduction limit is “0”, enter your unused RRSP deduction room at the end of 2017 at Step 3. Footnote 2b

Certain income you earned in 2017 while you were a non-resident of Canada qualifies as earned income. To find out the types of income that qualify, call the International Enquiries for Individuals and Trusts at one of the following numbers: 1-800-959-8281 (toll free within Canada and the United States), or 613-940-8495 (from outside Canada and the United States—we accept collect calls by automated response. You may hear a beep and experience a normal connection delay). For more information on residency, see Income Tax Folio S5-F1-C1, Determining an Individual’s Residency Status. Footnote 3b

If you are a “connected person” you may have to enter an amount in Step 4 in addition to amounts from your T4 or T4A slips. If this applies to you, your employer will give you Form T1007, Connected Person Information Return.

If you participate in a foreign plan and your employer does not carry on a business in Canada, you may have to enter an amount on line 32 in addition to amounts from your T4 or T4A slips. To determine the amount you have to enter, call the International Enquiries for Individuals and Trusts at one of the following numbers: 1-800-959-8281 (toll free within Canada and the United States), or 613-940-8495 (from outside Canada and the United States—we accept collect calls by automated response. You may hear a beep and experience a normal connection delay).

Unused RRSP, PRPP, or SPP contributions

This section applies to you if you did not use all of your RRSP , PRPP , or SPP contributions as a deduction in the year you made them. It does not apply to contributions that were designated as repayments under the HBP or the LLP , or contributions that were used to cancel an LLP or HBP withdrawal. Your unused RRSP, PRPP and SPP contributions from previous years will be on your RRSP Deduction Limit Statement shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2018. To report new unused contributions, you have to file Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities, with your income tax and benefit return. For more information, see Keeping track of your RRSP, PRPP and SPP contributions – Schedule 7.

If you did not deduct all of the contributions you made to your RRSP , PRPP or SPP , or your spouse’s or common law partner’s RRSP in 1991 and later years (or your spouse’s or common law partner’s SPP in 2010 and later years), you have two options: you can leave the unused contributions in the plan or you can withdraw them.

Withdrawing the unused contributions

If you withdraw the unused contributions, you have to include them as income on your income tax and benefit return. However, you may be able to deduct an amount equal to the withdrawn contributions that you include in your income, if you or your spouse or common‑law partner received the unused contributions from an RRSP , a PRPP , an SPP or a RRIF :

You can deduct the amount if you meet all of the following conditions:

In addition, it has to be reasonable for us to consider that at least one of the following applies:

Withdrawal made using Form T3012A – Tax Deduction Waiver on the Refund of your Unused RRSP , PRPP , or SPP Contributions from your RRSP – If you meet all of the previous conditions and have not already withdrawn the unused RRSP , PRPP or SPP contributions, you can withdraw them from your RRSP (if you have one) and not have tax withheld. To do this, fill out Form T3012A. This form cannot be used to withdraw SPP or PRPP contributions, or unused RRSP contributions that were transferred to a RRIF . To make a withdrawal from a RRIF , SPP or PRPP , see Withdrawal made without Form T3012A below.

If the unused RRSP , PRPP, or SPP contributions are withdrawn from your RRSP based on a Form T3012A that we approved, do all the following:

Withdrawal made without Form T3012A. If you withdraw unused RRSP , PRPP or SPP contributions without Form T3012A, the issuer of the plan has to withhold tax. The amount you withdraw from your RRSP should be reported on line 129 of your income tax and benefit return if it appears in box 22 of the T4RSP slip. If the amount appears in box 16 and box 24 of the T4RIF slip and you are 65 years or older at the end of December 2018, report the amount from box 16 on line 115 . Otherwise, report that amount on line 130 . The amount you withdraw from your PRPP will appear in box 194 of the T4A slip and the amount you withdraw from your SPP will appear in box 16 of the T4A slip. Report those amounts on line 130.

In all cases, claim the tax the issuer withheld on line 437 of your income tax and benefit return.

Fill out Form T746, Calculating Your Deduction for Refund of Unused RRSP, PRPP, and SPP Contributions, to calculate the amount you can deduct for the withdrawal. For more information about claiming the deduction for the withdrawal of unused RRSP contributions, see line 232 in the Income Tax and Benefit Guide.

Tax on RRSP, PRPP, or SPP excess contributions

Generally, you have RRSP, PRPP or SPP excess contributions if your unused contributions from prior years and your current calendar year contributions are more than your RRSP deduction limit shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2018, plus $2,000.

The $2,000 is reduced when you have a negative RRSP deduction limit which may be due to a PSPA amount. Also, you can only qualify for the additional $2,000 amount if you were 18 or older at any time in 2017.

Generally, you have to pay a tax of 1% per month on your unused contributions that exceed your RRSP deduction limit by more than $2,000. Your notice of assessment or notice of reassessment will indicate that you may have to pay a 1% tax on RRSP , PRPP or SPP excess contributions if your unused RRSP , PRPP or SPP contributions exceed your RRSP deduction limit. For information about contributing to a PRPP , see Contributions to a PRPP. You can view your RRSP information online by going to My Account for Individuals or by using the MyCRA mobile app at Mobile apps.

Note

You may not have to pay the 1% tax on all of your excess contributions, if one of the following situations applies:

Follow the six-step process described in Chart 4 to determine if you have to fill out a T1-OVP , 2018 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions, to calculate the amount subject to tax and the tax payable.

If you determine that you have to pay this 1% tax, you have to file your filled out T1-OVP return and pay the tax no later than 90 days after the end of the year in which you had the excess contributions.

Penalty – If you owe tax in a year and do not file your T1-OVP return within 90 days after the end of that year, we will charge you a late‑filing penalty. The penalty is 5% of your balance owing, plus 1% of your balance owing for each month that your income tax and benefit return is late, to a maximum of 12 months. Your late‑filing penalty may be higher if we charged you a late‑filing penalty on your T1‑OVP return for any of three previous years.

Attach your payment to your filled out T1-OVP return and submit it to your tax centre. If you do not pay your tax by the deadline, you may also have to pay arrears interest on any unpaid amount.

Interest – If you have a balance owing in a year, we charge compound daily interest starting on the 91 st day (usually April 1 st ) of the following year on any unpaid amounts owing for that year. This includes any balance owing if we reassess your income tax and benefit return. In addition, we will charge you interest on the penalties indicated in the previous section, starting on that 91 st day.

Voluntary disclosure – You may have had to file a previous year income tax and benefit return, but you have not sent it or you sent us an incorrect income tax and benefit return. If so, you can voluntarily file or correct that income tax and benefit return under the Voluntary Disclosures Program, and pay only the taxes owing (plus interest) without penalty.

Note

This program does not apply to any income tax and benefit return for which we have started a review.

For more information, and to see if your disclosure qualifies for this program, see Information Circular IC00-1, Voluntary Disclosures Program.

Be sure to indicate clearly, on any disclosure you make, that you are submitting information under the Voluntary Disclosures Program.

Which return do you have to use?

Waiver of the RRSP excess contribution tax – If you determined that you must pay a tax on your RRSP excess contributions, you may ask in writing that we waive the tax if the following two conditions are met:

To consider your request, we will need a letter from you that explains:

All supporting documents should be included with your letter, such as copies of your RRSP , PRPP , SPP , or RRIF account statements that identify the date you withdrew your excess contributions, as well as any other correspondence that shows that your excess contributions arose due to a reasonable error.

For more information on cancellation or waiver of late-filing penalties and interest, see Information Circular IC07-1 Taxpayer Relief Provisions.

Chart 4 – Do you have to fill out a 2018 T1-OVP return?

If you follow the steps below and arrive at a point where we say, “You do not have to fill out a 2018 T1-OVP,” you are not subject to the 1% per-month tax. You do not have to go any further.

If your 2018 RRSP deduction limit includes a net Past Service Pension Adjustment (PSPA) for 2018 or your unused RRSP deduction limit at the end of 2017 was a negative amount, fill out a T1-OVP, 2018 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions, to determine if you are subject to the 1% per-month tax. If you are not subject to this tax for 2018, you may be subject to it for 2019.

Step 1: Does one of these situations apply to you?

If one of these situations applies to you, go to Step 2.
If neither of these situations apply to you, you do not have to fill out a 2018 T1-OVP.

Step 2: Is your RRSP deduction limit more than the total of unused RRSP contributions

Is your 2018 RRSP deduction limit from your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2018, more than the total of your unused RRSP , PRPP and SPP contributions (including gifts) made from January 1, 1991 to December 31, 2017, plus the total RRSP , PRPP or SPP contributions (including gifts and employer PRPP contributions) made during 2018?

If no, go to Step 3.
If yes, you do not have to fill out a 2018 T1-OVP.

Step 3: Were you younger than 19 at any time in 2018?

If no, go to Step 4.
If yes, you may be subject to tax on your unused RRSP , PRPP , or SPP contributions. Fill out a T1-OVP-S, 2018 Simplified Individual Tax Return for RRSP, PRPP an SPP Excess Contributions, to determine the amount of this tax.

Step 4: The total of unused RRSP, PRPP or SPP contributions is less than your RRSP deduction limit

Are your unused RRSP , PRPP , or SPP contributions (including gifts) made from January 1, 1991 to December 31, 2018, less than the total of your 2018 RRSP deduction limit from your latest notice of assessment, notice of reassessment, or T1028 plus $2,000?

If no, go to Step 5.
If yes, you do not have to fill out a 2018 T1-OVP.

Step 5: Situations that may apply to you

If all of these situations apply to you, you do not have to fill out a 2018 T1-OVP.
If one of these situations does not apply to you, go to Step 6.

Step 6: Participation in a qualifying group RRSP

Were all the unused contributions at the end of 2018 mandatory contributions made in 2018 as a result of your participation in qualifying group plan amounts?

If yes, you do not have to fill out a 2018 T1-OVP. Footnote 1tb3
If no, you may be subject to tax on your unused RRSP contributions. Fill out a 2018 T1-OVP to determine the amount of this tax.

Footnote 1tb3

Mandatory contributions to a group RRSP or a PRPP will not be subject to the 1% per month tax on excess contributions for the year the contributions are made. However, it may be subject to such a tax in the following year. RRSP annuitants and PRPP members must at all times, monitor closely all transactions done in their RRSP and PRPP plans.

Chapter 3 – RRIF contributions

This chapter provides general information about RRIFs and lists the types of property you can contribute to your RRIF . Usually, you can only contribute to your RRIF by directly transferring certain amounts you receive or are considered to have received.

Property from an RRSP , PRPP, or SPP

You can contribute to your RRIF by having property transferred directly from: