Personal Finance

Is RRSP contribution amounts transferrable between spouses?

  • Last Updated:
  • Feb 27th, 2010 4:37 pm
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[OP]
Newbie
Feb 26, 2010
5 posts
canada

Is RRSP contribution amounts transferrable between spouses?

Spouse 1 has 2009 RRSP contribution limit of $40k.

Spouse 2 has 2009 RRSP contribution limit of $5k.

Both spouses file separate tax returns.

Spouse 1 will not utilize most of their contribution potential, but
Spouse 2 will utilize 100% of theirs. Can some of the excess limit from
Spouse 1 be transferred over to Spouse 2 to increase that person's 2009
RRSP contribution?

Or can Spouse 1 make an RRSP contribution that is applicable against the
income of Spouse 2?

The intention is to reduce the tax payable (or increasing the refund) for spouse 2 for the 2009 tax year.
5 replies
Deal Addict
May 20, 2003
2864 posts
24 upvotes
Nigel8600 wrote:
Feb 27th, 2010 1:42 pm
Hmm, I think you are looking for a spousal rrsp.
sumguy99 wrote:
Feb 27th, 2010 11:23 am
The intention is to reduce the tax payable (or increasing the refund) for spouse 2 for the 2009 tax year.
If the goal is to reduce the taxable income of Spouse 2, then spousal RRSP will not do you any good. The spouse whose contribution was used gets the tax deduction.
Deal Fanatic
User avatar
Dec 27, 2009
6279 posts
3484 upvotes
Ottawa, ON
If you contribute to your spouse's RRSP - it is you who gets the deduction. However, you cannot exceed your own contribution room (you would be limited to $5,000).
Deal Addict
User avatar
Feb 1, 2005
2130 posts
154 upvotes
mudd_stuffin wrote:
Feb 27th, 2010 11:32 am
The answer is no.
+1.

Only the spouse that has the contribution limit (actually it's probably least confusing to call it a "deduction limit") can deduct that amount. Whether or not the spouse contributes to his/her own or his/her spouse's (the spousal RRSP) is another matter.

I.e., Spouse 1 can contribute all 40k to a spousal RRSP for Spouse 2 and Spouse 2 can contribute to his/her own RRSP so that Spouse 2 has $45k in RRSPs, but Spouse 2 can only deduct $5k and Spouse 1 can only deduct $40k.

But this usually works out best anyway because the income (and hence the tax required to be paid on it) from the RRSP all goes to Spouse 2, who, based on the low limit, is probably in a lower tax bracket than Spouse 1, and Spouse 1 gets to deduct a larger amount from his/her income.

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