Transferring the non-eligible part of a retiring allowance
The non-eligible part can be contributed to your RRSP or to a spousal or common-law partner RRSP, up to the amount of your available RRSP deduction limit. Amounts cannot be contributed 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.
Your employer may be willing to contribute directly on your behalf the non-eligible part to your RRSP or to a spousal or common-law partner RRSP. You will need to advise your employer of the amount you are able to contribute based on your RRSP deduction limit and your employer will not withhold tax.
If you choose to receive the non-eligible part in cash, you can make the contribution yourself to your RRSP or to a spousal or common-law partner RRSP. Your employer will withhold tax in this situation.
You will receive a receipt for any amount of the non-eligible part you contributed to your RRSP or to a spousal or common-law partner RRSP.
Filling out your Income Tax and Benefit Return
Box 67 of your T4 slip shows the part of your retiring allowance that is not eligible. Report that amount on line 13000 of your Income Tax and Benefit Return.
Fill out Schedule 7, RRSP, PRPP and SPP Unused Contributions, Transfers, and HBP or LLP Activities, indicating the amount contributed at line 2 or 3 as per the contribution date, and include Schedule 7 with your Income Tax and Benefit Return. If you made the contributions to your RRSP or to a spousal or common-law partner RRSP in the tax year you received the retiring allowance, or no later than 60 days after the end of that year, claim a deduction for contributions up to your RRSP deduction limit that relate to the non-eligible part, on line 20800 of your Income Tax and Benefit Return. If you invested the non-eligible amounts to your RPP, claim a deduction on line 20700 of your Income Tax and Benefit Return.
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