Commutation payments from your RRSP
If you receive any of the types of amounts listed below (for example in cash or by cheque), you have to include them in your income for the year you receive them and you cannot transfer them on a tax-deferred basis. Instead, if you want to transfer these amounts to another registered plan or fund and defer the tax, make sure you inform the payer to transfer them directly.
A commutation payment from your RRSP may be transferred directly to an RRSP, a RRIF, a PRPP or a SPP to buy yourself an eligible annuity. You can use Form T2030, Direct Transfer Under Subparagraph 60(l)(v) to make this request.
If you transfer the amount to your RRSP, you must be 71 or younger at the end of the year in which you transfer the funds.
You do not have to use the form listed above. The institution that transfers your payments may use other types of documents to record the transfer. The institution has to provide you with confirmation of the details of the transfer.
Filling out your Income Tax and Benefit Return
This commutation payment is shown in box 22 of your T4RSP slip. Report it on line 12900 of your income tax and benefit return.
- If you transfer the amount to your RRSP, fill out and submit Schedule 7, RRSP, PRPP and SPP Unused Contributions, Transfers and HBP, or LLP Activities with your income tax and benefit return. Show the amount of the payment transferred on line 24640 of this schedule and claim it on line 20800 of your income tax and benefit return
- If you transfer the amount to your RRIF or to an issuer to buy an eligible annuity, claim a deduction for the amount you transfer on line 23200 of your income tax and benefit return
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