What happens if you go over your RRSP deduction limit?

If you (or your employer for pooled registered pension plan (PRPP) purposes) contribute more to your RRSP, PRPP or SPP, or your spouse's or common-law partner's RRSP or SPP than your RRSP deduction limit allows, you will have an excess contribution.
Generally, you have to pay a tax of 1% per month on excess contributions that exceed your RRSP deduction limit by more than $2,000 unless you:

If you have to pay this 1% tax, fill out a T1-OVP, 2021 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions return and send it to your tax centre. When you file the return, send documents such as RRSP account transaction statements confirming the dates of contribution(s) and withdrawal(s). Please note RRSP receipts and T4RSP slips do not contain this information. Pay the tax within 90 days after the calendar year avoid late-filing penalties or interest charged.

If you'd like the CRA to complete the return(s) for you, send us your authorization and your account transaction statement(s) mentioned above that show the amounts and dates of your contributions and withdrawals for the year(s) in which you have excess contributions.

Can the Canada Revenue Agency (CRA) cancel or waive the tax on your excess contributions?

You can ask the CRA in writing to consider cancelling or waiving the tax if the following two conditions are met:

Fill out an RC2503, Request for Waiver or Cancellation of Part X.1 Tax – RRSP, PRPP and SPP Excess Contribution Tax. Include the following:

How does a voluntary disclosure work?

If you realize the information you gave to the CRA is wrong or incomplete, you may be able to make a voluntary disclosure. To see if your disclosure qualifies for this program, go to Voluntary Disclosures Program.

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

Late-filing penalties

The CRA will charge a late-filing penalty if you do not file your T1-OVP, 2021 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions return on time. The due date for filing the T1-OVP is 90 days after the end of the calendar year.

The penalty is:

Your late-filing penalty may be higher if CRA charged you a late-filing penalty on your T1 OVP return for any of the three previous years.

Interest charges

Interest is compounded daily on:

CRA calculates interest starting on the 91st day of the following year.

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

Forms and publications

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