Excess amounts from a RRIF

An excess amount is any payment you receive from your RRIF that is above the minimum amount required to be paid out for the year. Under certain circumstances, excess amounts can be transferred directly to your RRSP, RRIF, SPP, PRPP, or to an annuity.

Excess transfer amount from RPP lump-sum amounts

In most cases, if you transfer an RPP lump-sum amount directly to another RPP, SPP, RRSP, PRPP or to a RRIF, you do not have to include any part of the amount in your income, and you cannot deduct it. However, the Income Tax Act limits the amount you may transfer on a tax-deferred basis from a defined benefit provision of an RPP to a money purchase provision of an RRSP, a PRPP, an SPP or a RRIF.

If the amount you transfer is more than the limit, you have to include the excess transfer in your income. The T4A slip shows the excess transfer as pension income in boxes 018 and 108, which you report on line 13000 of your income tax and benefit return.

If you made the excess transfer to your RRSP, PRPP or SPP for 2023, we consider you to have contributed it in the year in which you transferred it. Even if the excess transfer is made to your RRIF, we still consider you to have contributed it to your RRSP, PRPP or SPP. In both cases, the issuer, carrier or administrator will give you an RRSP, PRPP or SPP receipt for this contribution.

You can deduct these RRSP, PRPP or SPP contributions on line 20800 of your income tax and benefit return, up to your RRSP deduction limit for the year in which you made the transfer. If you cannot deduct the contributions because they are more than your RRSP deduction limit for the year, you can leave them in your RRSP, PRPP, SPP or your RRIF and deduct them for future years up to your RRSP deduction limit for those years.

Withdrawal from an RRSP or a RRIF

If you withdraw an excess transfer amount from an RRSP or a RRIF in 2022 and we consider you to have contributed an excess transfer to your RRSP, a deduction is available if you meet both of the following conditions:

• you did not previously deduct the excess amount as an RRSP contribution
• you included the excess amount in your income for the year you received it

You can use Form T1043, Deduction for Excess Registered Pension Plan Transfers You Withdrew from an RRSP, PRPP, SPP or RRIF, to calculate your deduction. Deduct the amount on line 23200 of your income tax and benefit return.

Filling out your income tax and benefit return

The excess amount shown in box 24 of your T4RIF slip is for information purposes only. Only include the amount shown in box 16 of your T4RIF slip on your income tax and benefit return.

Reporting the income

• If you were under 65 on December 31 of the tax year and had received the payment for a reason other than due to the death of a spouse or common-law partner, report the income on line 13000 of your return
• If you were 65 or older on December 31 of the tax year or you received the payment due to the death of your spouse or common-law partner, report the payment on line 11500 of your return

Claiming a deduction

• If you directly transferred this amount to your RRSP, claim a deduction for the amount on line 20800 of your return
• If you directly transferred this amount to another RRIF or to an issuer to buy an eligible annuity, claim a deduction for the amount on line 23200 of your return

If you received the payment in cash or by cheque before making the transfer, the transfer is not tax-free. You have to report the income on your return and you cannot claim a deduction.

Forms and publications

• Form T1043, Deduction for Excess Registered Pension Plan Transfers You Withdrew from an RRSP, PRPP, SPP or RRIF
• Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP, PRPP, or SPP Contributions from your RRSP, PRPP or SPP
• Guide T4040, RRSPs and Other Registered Plans for Retirement