Personal Finance

RRSP overcontribution question

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  • Feb 28th, 2012 7:47 pm
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Jul 14, 2007
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RRSP overcontribution question

I understand that there is a lifetime over contribution allowance of $2000. If I contribute this amount today, will I get a tax deduction for it for the 2011 tax year? Or is it simply that this amount is allowed to grow tax-free but I don't get a deduction?
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Deal Addict
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Feb 1, 2005
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DrXenon wrote: I understand that there is a lifetime over contribution allowance of $2000. If I contribute this amount today, will I get a tax deduction for it for the 2011 tax year? Or is it simply that this amount is allowed to grow tax-free but I don't get a deduction?

The overcontribution room is wiggle room so that you don't get hit with the 1% penalty if you go off by a little. $2000 is too much.

The lifetime isn't really meaningful, it's just that at any time, you can't have more than $2,000 than what you're allowed to deduct.

Your last sentence is mostly correct, it's allowed to grow tax-free, but the overcontribution essentially gets wiped out when you get earned income and new RRSP contribution (deduction) room the next year.
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Dec 26, 2010
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Calgary
DrXenon wrote: I understand that there is a lifetime over contribution allowance of $2000. If I contribute this amount today, will I get a tax deduction for it for the 2011 tax year? Or is it simply that this amount is allowed to grow tax-free but I don't get a deduction?

You can use it in a future year, not this one. So If you over contribute $2000 this year, you'll have to wait for next years tax time to claim it.

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