Repayments to your RRSP under the LLP
Over a period of 10 years, you have to repay your RRSP, PRPP or SPP the amounts you withdrew under the LLP. Generally, for each year of your repayment period, you have to repay 1/10 of the total amount you withdrew until the LLP balance is zero.
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How to make your repayments
To make your repayments, you have to contribute to your RRSP, PRPP or SPP in the repayment year or in the first 60 days of the following year. You can make the repayments to any of your RRSPs with any issuer, your PRPP, and to your SPP or you can open a new RRSP.
You have to designate your repayment for the year by completing Schedule 7, RRSP, PRPP and SPP Unused Contributions, Transfers, and HBP or LLP Activities (for all) (included in your income tax package), and file it with your income tax and benefit return for the repayment year.
You have to make your repayments to your RRSP, PRPP or SPP even if your RRSP deduction limit is zero or a negative amount. We do not consider an amount you designate as a repayment under the LLP to be an RRSP contribution. Therefore, you cannot claim a deduction for this amount on your income tax and benefit return.
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Example
Betty has an LLP balance of $7,500. Her repayment period is from 2022 to 2031. For her first repayment year, she needs to repay $750, which is 1/10 of the amount she withdrew. Betty contributes $6,000 to her RRSPs in 2022. To designate $750 as her 2022 repayment, she has to file Schedule 7 with her 2022 income tax and benefit return. Betty can deduct the remaining $5,250 she contributed if the RRSP deduction limit shown on her notice of assessment for 2021 is at least $5,250.
When and how much to repay
You will receive an LLP Statement of Account each year with your notice of assessment or notice of reassessment. This statement will show the LLP withdrawals, your LLP balance, the amounts you have repaid to date, cancellations, income inclusions, and the amount you have to repay the following year.
To view your LLP Statement of Account online, go to My account for Individuals. To view the LLP Statement of Account of someone who has authorized you on their behalf go to Represent a Client.
To determine when you have to start repaying your LLP withdrawals, use the chart. The latest year you can start repaying your LLP withdrawals is the fifth year after your first LLP withdrawal. However, in most cases, you have to start repaying your withdrawals before that year.
We determine when your repayment period starts by checking if the LLP student is a qualifying student for at least three months during the year. If the LLP student does not meet this condition two years in a row, your repayment period usually starts in the second of those two years. If the LLP student continues to meet this condition every year, your repayment period starts in the fifth year after your first LLP withdrawal.
In some cases, the LLP student is not a qualifying student for at least three consecutive months in any calendar year. This can happen if the program is short and the student starts it near the end of the year. In that case, your first repayment year is the second year after the year of your LLP withdrawal.
If the student is not a qualifying student for three months in any year because the student left the program, see If the LLP student leaves the educational program
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Example 1
Sarah makes LLP withdrawals from 2019 to 2022. She continues her education from 2019 to 2024 and is a qualifying student up to tax year 2022. Sarah’s repayment period begins in 2024, since 2024 is the fifth year after the year of her first LLP withdrawal. The due date for her first repayment is March 3, 2025, which is 60 days after the end of 2024, her first repayment year.
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Example 2
Joseph makes an LLP withdrawal in 2021 for a qualifying educational program he is enrolled in during the same year. He is a full-time student for five months of 2021. Joseph completes the educational program in 2022, and he is a full-time student for five months in 2022. He is not considered a qualifying student for 2023 or 2024. Joseph’s repayment period begins in 2024.
Note
Even if you become bankrupt, you still have to repay all your LLP withdrawals to your RRSPs. If you do not, you have to include the required amounts in your income each year as they become due.
When to start repaying your LLP withdrawals
Use this chart to determine when you have to start repaying your LLP withdrawals. This chart does not cover cancelling your withdrawal. For that situation, see "How to cancelling your LLP withdrawal".
Step 1
Is this the year of your first LLP withdrawal?
If no, go to Step 2.
If yes, you do not have to start repaying your LLP withdrawal this year.
Step 2
Is this the fifth year after your first LLP withdrawal?
(If you made your first LLP withdrawal in 2018, then 2023 would be the fifth year after your first LLP withdrawal.)
If no, go to Step 3.
If yes, you have to start repaying your LLP withdrawals this year.
Step 3
Will the LLP student be considered a qualifying student for at least three months this year?
If no, go to Step 4.
If yes, you do not have to start repaying your LLP withdrawals this year.
Step 4
Was the LLP student considered a qualifying student for at least three months last year?
If no, you have to start repaying your LLP withdrawals this year.
If yes, you do not have to start repaying your LLP withdrawals this year.
Contributions you cannot designate
Not all contributions you make to your RRSP, PRPP or SPP in the repayment year, or in the first 60 days of the following year, can be designated as a repayment under the LLP.
You cannot designate all following contributions that:
- your employer made to your PRPP
- you make to your spouse's or common-law partner's RRSPs (or that they make to your RRSPs)
- are amounts you transfer directly to your RRSPs from a registered pension plan, deferred profit sharing plan, registered retirement income fund, SPP, PRPP, or another RRSP
- are amounts you deducted as a re-contribution of an excess qualifying withdrawal that you designated to have a provisional past service pension adjustment approved
- are amounts you designate as a repayment under the HBP for the year
- are amounts you contribute in the first 60 days of the repayment year, that meet one of the following conditions:
- you deducted on your income tax and benefit return for the previous year
- you designated as a repayment for the previous year under the HBP or the LLP
- are amounts you receive in the repayment year (such as retiring allowances) that you include in your income, designate as a transfer to your RRSP and deduct on your income tax and benefit return for the year of receipt
If you want to repay earlier
Any payments you make before the first repayment year reduce your first required repayment. For example, if your first repayment year is 2023 and $1,000 is your required repayment and you make an early repayment of $600 in 2022, your required repayment for 2023 is $400.
If you repay less than the amount required
If you designate an amount less than the amount you have to repay, you have to include the difference in your income on line 12900 of your income tax and benefit return. The amount you include in your income is equal to the amount you have to repay minus the amount you designate as a repayment for the year. The amount you include in your income cannot be more than the result of this calculation.
Your LLP balance is reduced by the amount you repay plus the amount you include in income. If you want to calculate the amount you have to repay for the next year, divide your LLP balance by the number of years remaining in your repayment period.
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Example
Josée makes a $10,000 LLP withdrawal in 2020 for a four-month qualifying educational program that finishes in the same year. For 2022, Josée’s repayment is $1,000 ($10,000 ÷ 10). Josée contributes $700 to her RRSPs in 2021, and she files Schedule 7 with her income tax and benefit return to designate the $700 as a repayment under the LLP.
Josée has to include $300 in her income on line 12900 of her 2022 income tax and benefit return. She determined this as follows:
She cannot claim a deduction for the $700 contributed to her RRSPs because she designated those contributions as a repayment under the LLP. In 2022, she will have to repay $1,000 ($9,000 ÷ 9).
If you repay more than the amount required for a year
If you repay and designate more than you have to repay for a year, the amount you have to repay in each of the following years will be less. The LLP Statement of Account we send with your notice of assessment or notice of reassessment takes into account any additional payments you make and tells you how much you have to repay for the next year. If you want to calculate the amount you have to repay for the next year, divide your LLP balance by the number of years left in your repayment period.
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Example
Alexander’s repayment period began in 2018. His LLP balance was $8,500. Alexander’s repayment for 2018 was $850 ($8,500 ÷ 10). He made the repayment for 2018, 2019 and 2020. In 2021, he received an inheritance and decided to contribute $4,000 to his RRSPs and designate that amount as a repayment under the LLP for 2021. He calculates the amount he has to repay for 2022 using the following chart:
Calculating the annual amount Alexander has to repay Year LLP balance at the beginning of the year Amount Alexander has to repay for the year Amount Alexander designates as a repayment for the year LLP balance for the following year 2018 $8,500 $850
($8,500 ÷ 10)$850 $7,650 2019 $7,650 $850
($7,650 ÷ 9)$850 $6,800 2020 $6,800 $850
($6,800 ÷ 8)$850 $5,950 2021 $5,950 $850
($5,950 ÷ 7)$4,000 $1,950 2022 $1,950 $325
($1,950 ÷ 6)$325 $1,625
Situations when the repayments have to be made in less than 10 years
Additional repayment rules apply if you meet one of the following conditions:
- you die
- you become a non-resident of Canada
- you reach the age of 71
If the person who made the LLP withdrawal dies
Usually, if the person who made the LLP withdrawal dies, the legal representative (administrator) has to include the LLP balance in the deceased person's income for the year of death. If the deceased person contributed to an RRSP, PRPP or SPP in the year of death, the representative can designate the contributions as a repayment under the LLP by completing Schedule 7, RRSP, PRPP and SPP Unused Contributions, Transfers, and HBP or LLP Activities (for all). This reduces the LLP balance that has to be included in the deceased person's income.
Note
An LLP student who dies may not have been the person who made the LLP withdrawal. If this is the case, the person who made the withdrawal makes the required LLP repayments over the usual 10-year period.
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LLP election on death
If, at the time the person who made the LLP withdrawal dies, and the deceased had a spouse or common-law partner who is a resident of Canada, that spouse or common-law partner can elect jointly with the deceased person's legal representative (administrator) to make the repayments and to not include the LLP balance in the deceased person's income.
If the surviving spouse or common-law partner is also the representative, they make the election.
To make this election, the surviving spouse or common-law partner and the deceased person's legal representative sign a letter and attach it to the deceased person's income tax and benefit return for the year of death. The letter should state that an election is being made to have the surviving spouse or common-law partner make the repayments under the LLP, and to not have the income inclusion rule apply to the deceased person. The deceased person's LLP balance then becomes the survivor's LLP balance. The surviving spouse or common law partner makes the repayments to their own RRSP, PRPP or SPP.
Note
If this election is made and the deceased person had not made a repayment for the year of death, no repayment will be required for that year for the deceased.
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If the surviving spouse or common-law partner has no LLP balance at the time the person who made the LLP withdrawal dies
The survivor is deemed to be the LLP student for the LLP balance taken over from the deceased person. The surviving spouse or common-law partner will have to make repayments to their RRSP over the normal 10-year repayment period, determined as though the year of their first LLP withdrawal is the year the person died. For more information on when the repayment period will begin see When and how much to repay and the chart.
If the surviving spouse or common-law partner wants to make LLP withdrawals, the LLP balance taken over from the deceased person will limit the amount they can withdraw.
The survivor's total limit will be $20,000 minus the LLP balance taken over from the deceased person. The annual LLP limit for the year of death will be $10,000 minus the remaining LLP balance of the deceased person.
Example
Isabelle died in 2022. At the time of death, she had an LLP balance of $7,200. Her repayment period began in 2021. Her husband Bruno is her administrator (legal representative).
Bruno decides to elect to make the repayments. When he prepares Isabelle’s final income tax and benefit return for 2022, he does not include her LLP balance in her income. Instead, he writes a letter explaining that he is electing to make his late wife’s LLP repayments. He signs the letter and attaches it to her final income tax and benefit return. Bruno becomes an LLP participant in 2022 having an LLP balance of $7,200.
If Bruno is not a full-time qualifying student for at least three months in both 2023 and 2024, his repayment period will begin in 2024. He may choose to make repayments in 2022 or 2023, in which case they will be applied to the balance to reduce or eliminate the required repayment in 2024 and subsequent years. For more information see If you want to repay earlier.
If Bruno wants to participate in the LLP in 2022 for his own education, his total LLP limit is now $20,000 minus the remaining LLP balance from Isabelle. As well, his annual LLP limit for 2022 is $10,000 minus the remaining LLP balance from Isabelle.
If Bruno did not make the election, he would have to include $7,200 as income on line 12900 of Isabelle's final income tax and benefit return for 2022.
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If the surviving spouse or common-law partner already had an LLP balance of their own
At the time the person dies, the deceased person's LLP balance is added to the survivor's LLP balance. This may cause the survivor's LLP balance to be more than the $10,000 annual limit or the $20,000 total limit. If this occurs, we will not include the excess in the income of either the survivor or the deceased person.
The surviving spouse or common law partner has to repay the new balance over their own repayment period.
Example
Irene died on June 10, 2022. At the time of her death, she had an LLP balance of $7,000 to be repaid. Irene’s common law partner Paul is the estate’s administrator (legal representative).
He decides to make Irene’s LLP repayments. He has his own LLP balance of $14,000, and his repayment period began in 2022. Paul will add Irene’s LLP balance of $7,000 to his own LLP balance of $14,000.
However, Paul is only required to make a repayment of $1,400 in 2022 based on his own LLP balance of $14,000 at the beginning of the year. If he pays only the required amount in 2022, his minimum LLP repayment in 2023 will be $2,177 ($19,600 ÷ 9).
If you become a non-resident of Canada
If you become a non-resident of Canada after the year you made an LLP withdrawal, you have to include your LLP repayable balance in income on your income tax and benefit return for the year you become a non-resident or repay that balance to your RRSP, PRPP or SPP. The due date for this repayment is the earlier of the following dates:
- before the time you file your income tax and benefit return for the year that you become a non-resident
- 60 days after you become a non-resident.
You have to designate your repayment for the year by completing Schedule 7 and filing it with your income tax and benefit return for the year you become a non-resident. If you do not repay your LLP balance by the due date, you have to include the unpaid amount in your income for the year you became a non-resident. The amount is included in your income for the period you were a resident of Canada.
If you become a non-resident before the end of the year in which you make an LLP withdrawal, you have to cancel your LLP withdrawals by paying them back to your RRSP.
For more information, go to Cancelling an LLP withdrawal.
Your options in the year you turn 71
The year after you reach the age of 71, you will not be able to repay any withdrawals to your RRSP, PRPP or SPP. This is because you cannot contribute to an RRSP, PRPP or SPP the year after you turn 71 years of age.
In the year you turn 71, you can choose one of the following:
- repay your remaining repayable balance to your RRSP, PRPP or SPP
- make a partial repayment to your RRSP, PRPP or SPP. Your remaining repayable balance at the beginning of the year you turn 72 will be divided by the number of years remaining in your repayment period, and that calculated amount will be included as income on line 12900 of your income tax and benefit return for each of those years
- make no repayment to either your RRSP, PRPP or SPP. Your remaining repayable balance at the beginning of the year you turn 71 will be divided by the number of years remaining in your repayment period, and that calculated amount will be included as income on line 12900 of your income tax and benefit return for each of those years
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Example
In 2015, at the age of 64, Henry made an LLP withdrawal of $9,000. His repayment period began in 2020. The required annual repayment is $900.
In 2022, he reaches the age of 71. Henry’s LLP balance at the beginning of 2022 is $7,200 and he can choose to make an LLP repayment, or to include $900 in his income.
In 2022, Henry decides to contribute $3,000 to his PRPP and to designate that amount as a repayment under the LLP. This leaves him with an unpaid balance of $4,200 at the end of 2022. Henry will have to include $600 ($4,200 ÷ 7) in income for each year from 2023 to 2029.
If he did not repay any part of the $7,200, he would have to include $900 in income each year from 2022 to 2029. If he repaid the entire $7,200, he would not have to include any part of this amount in his income.
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