How contributions affect your RRSP deduction limit
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What is your RRSP deduction limit
Your registered retirement savings plan (RRSP) deduction limit, is the maximum amount you can deduct from contributions made to your RRSPs, PRPP, SPP and to your spouse’s or common-law partner’s RRSP or SPP for a year.
How is your RRSP deduction limit determined
The Canada Revenue Agency generally calculates your RRSP deduction limit as follows:
- your unused RRSP deduction room at the end of the preceding year
- The lesser of the two following items:
- 18% of your earned income in the previous year
- the annual RRSP limit (for 2023, the annual limit is $30,780)
- That exceeds one of the following items:
- your pension adjustment (PA)
- your prescribed amount for connected persons
- your pension adjustment reversal (PAR)
- your net past service pension adjustment (PSPA)
If you want to calculate your RRSP deduction limit yourself, see chart 3 of Guide T4040, RRSPs and Other Registered Plans for Retirement.
Who can contribute to an RRSP, PRPP, or SPP
Generally, you can contribute to your RRSP, PRPP, or SPP:
- until December 31st of the year you turn 71 years of age
- when you have an available RRSP deduction limit
You can contribute to your spouse’s or common-law partner’s RRSP or SPP until December 31st of the year that they turn 71 years of age.
What is the deadline to contribute to an RRSP, PRPP, or SPP for the purpose of claiming a deduction on your 2023 return
Contributions made to your RRSP, PRPP or SPP or your spouse's RRSP or SPP from March 2, 2023 to February 29, 2024 qualify.
What if you contribute more than your RRSP deduction limit
Generally, you have to pay a tax of 1 percent per month on your contributions that exceed your RRSP deduction limit by more than $2,000.
For more information, go to Excess Contributions
What RRSP, PRPP, or SPP contributions can you deduct on your income tax and benefit return
You can claim a deduction for:
- contributions you made to your RRSP, PRPP or SPP
- contributions you made to your spouse’s or common-law partner’s RRSP or SPP
- your unused RRSP, PRPP or SPP contributions from a previous year
You cannot claim a deduction for:
- amounts you pay for administration services for an RRSP
- brokerage fees charged to buy and sell within a trusteed RRSP
- the interest you paid on money you borrowed to contribute to an RRSP, PRPP, or SPP
- any capital losses within your RRSP
- employer contributions to your PRPP
What is not considered an RRSP, PRPP, or SPP contribution
The following are not considered to be an RRSP, PRPP, or SPP contribution for the purpose of claiming a deduction on your tax return. Find out the special rules that apply if you:
- transfer amounts to your RRSP, PRPP, and SPP
- repay funds that you withdrew under the Home Buyers’ Plan
- repay funds that you withdrew under the Lifelong Learning Plan
Amounts you transfer directly to your RRSP, PRPP, and SPP do not affect your RRSP deduction limit. However, you may need to include an amount in income and claim an offsetting deduction. See transferring certain types of payments for information about the special rules that apply.
Can contributions be made to a deceased individual’s RRSP, PRPP, or SPP
No one can contribute to a deceased individual’s RRSP, PRPP or SPP after the date of death.
But, the deceased individual’s legal representative can make contributions to the surviving spouse’s or common-law partner’s RRSP and SPP. The contribution must be made within 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 tax return, up to that individual’s RRSP deduction limit, for the year of death.
Forms and publications
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