Registered Retirement Income Funds (RRIFs) minimum withdrawal reduced: CRA and COVID-19
The minimum required withdrawal for all types of registered retirement income funds (RRIFs) has been reduced by 25% for the year 2020. Individuals who have already withdrawn more than the reduced 2020 minimum amount will not be permitted to re-contribute the excess amount back into their RRIFs. Tax will only be withheld if you withdraw more than your unreduced minimum amount.
The 25% reduction applies to the entire minimum amount for 2020. For example, if an individual’s 2020 RRIF minimum amount before the reduction is $12,000, they could have received the minimum amount of $1,000 per month. Due to the economic measure, their 2020 minimum amount is reduced by 25% to $9,000 ($12,000 x 75% = $9,000). If the individual had already received $1,000 from January to April for a total of $4,000, they would only need to receive a total of $5,000 for the rest of the year to reach their new minimum amount. This means their monthly RRIF payments are reduced to $625 for the remaining 8 months (8 x $625 = $5,000).
This change also applies to individuals receiving variable benefit payments from a money purchase registered pension plan (RPP) and a pooled registered pension plan (PRPP). This change does not apply to minimum withdrawals from Individual Pension Plans.
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