Transferring the eligible part of a retiring allowance
You can only transfer the eligible part of your retiring allowance to your own RPP, SPP, RRSP or PRPP.
The eligible part is:
- $2,000 for each year or part-year of service before 1996 in which you were employed by the employer or a person related to the employer from whom you received the retiring allowance
- You can also transfer an additional $1,500 for each year or part of year of service before 1989 in which you had earned no pension or DPSP benefit from employer contributions that either vested in you at the time of payment or that were previously paid to you
You will receive a contribution receipt for any amount directly transferred to your RRSP.
No tax is withheld if your employer directly transfers the eligible part of your retiring allowance.
The transfer of the eligible part of your retiring allowance to your RRSP, PRPP or SPP has no effect on your deduction limit.
The direct transfer of your retiring allowance to your RPP may result in a pension adjustment (PA) that will affect your RRSP deduction limit in subsequent years. For more information, contact your plan administrator.
You cannot transfer any part directly to a spousal or common-law partner RRSP. Also, amounts cannot be transferred to an RRSP if you were over 71 years old at the end of the tax year. For more information, see RRSP options when you turn 71 and Income Tax Folio S2-F1-C2, Retiring Allowances.
Filling out your Income Tax and Benefit Return
The eligible portion of your retiring allowance is reported in box 66 of your T4 slip. If you receive a T3 slip, the eligible portion is reported in box 47. Report the amount shown on your T4 or your T3 slip, on line 13000 of your income tax and benefit return.
For 2009 and prior years, box 26 of your T4A slip or your T3 slip shows the eligible portion of your retiring allowance. Report the amount on line 13000 of your income tax and benefit return for the year in which your receive it.
Claim a deduction for the amount you transfer to your RPP on line 20700 of your income tax and benefit return. Claim a deduction for the amount you transfer to your RRSP on line 20800 of your income tax and benefit return. Write the amount of the transfer on line 24640 and in box 15 of Schedule 7.
Include the full amount of all retiring allowances as income on line 13000. If some or all of a retiring allowance was transferred into an RRSP, the transferred amount should be shown as a deduction on lines 24640 and 24500 of Schedule 7.
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