Personal Finance

RRSP first 60 days contribution limit

  • Last Updated:
  • Jan 11th, 2019 2:30 am
[OP]
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Sep 4, 2005
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RRSP first 60 days contribution limit

Hi all,
I tried searching RFD and online and couldn't find anything on this.

My understanding is that I can contribute to my RRSP in the first 60 days of 2019. I will receive the tax slip for it and have to put it on my 2018 tax return. I can then elect whether I want that money to apply to the 2018 tax year or carry it forward to 2019.

Now for example, if my 2018 (and total) RRSP contribution limit was $10k and I fully maxed my RRSP putting in $10k in 2018. Let's assume my 2018 work will provide me a 2019 RRSP contribution limit of $11k. Can I begin contributing to the 2019 $11k limit now that it's 2019? Even though the first 60 days is always touted as tacking onto the 2018 tax year?

Because my 2018 contribution room is maxed, will contributing now and declaring it on my 2018 tax return mean I over contributed in 2018? Or does it simply mean it automatically must apply to 2019 tax year only? (Which is what I want it to do, and when I want to declare it for)
15 replies
Deal Addict
Oct 22, 2015
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You receive the new contribution limit from your 2018 income as of Jan 1 2019.
So yes you can contribute 11k now.
The 11k does not need to be applied for 2019. It can be carried indefinitely.
But you must report the contribution on your 2018 tax return.
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Oct 13, 2007
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You elect on your return how much you want to use as a deduction for the 2018 tax year. Whatever contributions were made in the first 60 days of 2019 can be deferred to next year.
Sr. Member
Sep 12, 2012
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Any contributions made in the first 60 days must be reported on your 2018 income tax return but if you have any over contribution, you can elect to defer it to future years so you don't get taxed for over contribution.
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OP, kudos to you for posting this before taking a wrong turn... I over-contributed in 2016 and instead of asking - I went through the hassle of withdrawing the excess then had to pay an accountant to file my taxes due to the complications (and lost that amount in contribution margin while doing it)
Last edited by wally_walrus on Jan 9th, 2019 10:55 pm, edited 1 time in total.
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Feb 23, 2009
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Lots of false info and confusion in replies.
I will try to simplify this:

"My understanding is that I can contribute to my RRSP in the first 60 days of 2019. I will receive the tax slip for it and have to put it on my 2018 tax return. I can then elect whether I want that money to apply to the 2018 tax year or carry it forward to 2019. "
Yes. A contribution in the first 60 days of 2019 can be used for 2018 or 2019. Please don't use the term "carry forward to 2019".
You made the contribution in 2019 and you can use it for 2019...you are not "carrying it forward".

"Now for example, if my 2018 (and total) RRSP contribution limit was $10k and I fully maxed my RRSP putting in $10k in 2018. Let's assume my 2018 work will provide me a 2019 RRSP contribution limit of $11k. Can I begin contributing to the 2019 $11k limit now that it's 2019? Even though the first 60 days is always touted as tacking onto the 2018 tax year?"

Your 2018 limit was $10K and you maxed it. You are done for 2018.
Your 2019 limit is $11K and yes, you can contribute now. Don't confuse the first 60 days of 2019 as "tacking onto 2018".

"Because my 2018 contribution room is maxed, will contributing now and declaring it on my 2018 tax return mean I over contributed in 2018? Or does it simply mean it automatically must apply to 2019 tax year only? (Which is what I want it to do, and when I want to declare it for)"
No. Contributing now will not make you over contribute for 2018. You declare the amount "in the first 60 days of 2019" section of your 2018 return and it doesn't count for 2018.
It applies to 2019. Make sure the contribution is not more than the $11K room you have for 2019. If it is, you will have to defer it to later years.
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Jun 26, 2005
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If you are in Toronto, also think about what you plan to invest inside your RRSP.

IMO, the best investment (for retirement) in Toronto is property. Primary residence is best (if you don't already own), then being a landlord to multiple properties. It isn't without work, but it isn't rocket science. It's best bang for the buck due to leverage (mortgages).

Save up for downpayment. 20%, and you apply for mortgage for 80%. Leverage.

I won't get into discussions, go to the real estate forum for that. But before you put tons of money into RRSP account, then buy stocks or mutual funds that perform average or loses, think about properties. You can't buy a condo with money stuck in RRSP. You and your family will be far well off if you own several mortgage free properties by the time you retire, and kids are grown.

I'm also reading the negatives of tax implications when you turn 71 and must withdraw from RRSP/RRIF. If you are investing successfully, your tax bracket may actually be higher than you are right now (before retirement) !

Food for thought.
Sr. Member
Aug 17, 2013
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rfdrfd wrote:
Jan 10th, 2019 12:29 pm

I'm also reading the negatives of tax implications when you turn 71 and must withdraw from RRSP/RRIF. If you are investing successfully, your tax bracket may actually be higher than you are right now (before retirement) !

Food for thought.
That's an outlier. The majority of the population peak income years are between 30-45. Even in this case when you make more in your 60's/70's, you're already in the high tax bracket, therefore the deferral will be a wash.
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orianna wrote:
Jan 10th, 2019 12:41 pm
That's an outlier. The majority of the population peak income years are between 30-45. Even in this case when you make more in your 60's/70's, you're already in the high tax bracket, therefore the deferral will be a wash.
Hehehe so the majority of people do so badly in their RRSP investments right?

Kinda ironic eh
Sr. Member
Aug 17, 2013
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rfdrfd wrote:
Jan 10th, 2019 1:56 pm
Hehehe so the majority of people do so badly in their RRSP investments right?

Kinda ironic eh
?

Most people who make $100-150 K in their 30's and 40's usually do not make $100k when they are retired at 71.
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Oct 29, 2002
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I bank with Scotia. I just opened a scotia itrade account for rrsp purposes. Can I just transfer funds to it, up to my limit, and count that towards my 2018 rrsp contribution? anything else i need to do?
[OP]
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Sep 4, 2005
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Thanks everyone for the replys.

pkrash wrote:
Jan 9th, 2019 10:24 pm
Lots of false info and confusion in replies.
I will try to simplify this:

"My understanding is that I can contribute to my RRSP in the first 60 days of 2019. I will receive the tax slip for it and have to put it on my 2018 tax return. I can then elect whether I want that money to apply to the 2018 tax year or carry it forward to 2019. "
Yes. A contribution in the first 60 days of 2019 can be used for 2018 or 2019. Please don't use the term "carry forward to 2019".
You made the contribution in 2019 and you can use it for 2019...you are not "carrying it forward".

"Now for example, if my 2018 (and total) RRSP contribution limit was $10k and I fully maxed my RRSP putting in $10k in 2018. Let's assume my 2018 work will provide me a 2019 RRSP contribution limit of $11k. Can I begin contributing to the 2019 $11k limit now that it's 2019? Even though the first 60 days is always touted as tacking onto the 2018 tax year?"

Your 2018 limit was $10K and you maxed it. You are done for 2018.
Your 2019 limit is $11K and yes, you can contribute now. Don't confuse the first 60 days of 2019 as "tacking onto 2018".

"Because my 2018 contribution room is maxed, will contributing now and declaring it on my 2018 tax return mean I over contributed in 2018? Or does it simply mean it automatically must apply to 2019 tax year only? (Which is what I want it to do, and when I want to declare it for)"
No. Contributing now will not make you over contribute for 2018. You declare the amount "in the first 60 days of 2019" section of your 2018 return and it doesn't count for 2018.
It applies to 2019. Make sure the contribution is not more than the $11K room you have for 2019. If it is, you will have to defer it to later years.
Thanks for breaking this down

However, this brings up another question:
Make sure the contribution is not more than the $11K room you have for 2019. If it is, you will have to defer it to later years.
What do you mean by this? I thought you can't put $20k into an RRSP and then deduct $11k in 2019 and the remaining nine in future years (e.g. 2020)?
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Mar 8, 2013
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Super_Chicken wrote:
Jan 10th, 2019 6:46 pm
...
What do you mean by this? I thought you can't put $20k into an RRSP and then deduct $11k in 2019 and the remaining nine in future years (e.g. 2020)?
I think that what is meant by 'defer' is 'delay'. Although you can 'defer' claiming the deduction for a contribution, you should not make contributions beyond your limit (remember that the contribution limit is not just for the current year, but also all unused contribution limits from previous years.) Just use the number on your Notice of Assessment.
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Feb 23, 2009
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Super_Chicken wrote:
Jan 10th, 2019 6:46 pm
Thanks everyone for the replys.



Thanks for breaking this down

However, this brings up another question:

What do you mean by this? I thought you can't put $20k into an RRSP and then deduct $11k in 2019 and the remaining nine in future years (e.g. 2020)?
"I thought you can't put $20k into an RRSP and then deduct $11k in 2019 and the remaining nine in future years (e.g. 2020)?"
No.
akaManny is correct.
It's best just to stick to the limits you have from your NoA's.
You are allowed a $2K lifetime over contribution without penalty, so you can use that.
You can defer/delay any over contribution more than the $2K by reporting, paying penalties and/or withdrawing the over contributions up until the CRA and you catch up.
You can plead that you made a mistake and will correct it, using next year's room, but it's just a lot of work for little gain (unless you were making a huge return in your investments, lol).
The CRA will of course catch up with you sooner or later and you want as few red flags as possible.
You also can go back 3 yrs and resubmit your previous returns if you think you can gain something.
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Nov 4, 2007
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orianna wrote:
Jan 10th, 2019 2:01 pm
?

Most people who make $100-150 K in their 30's and 40's usually do not make $100k when they are retired at 71.
I think what they mean is that someone making 6 figures and maxes their rrsp every year until they retire at 65 can end up with a huge rrsp balance if investing well. This could easily hit $2-3 million. Once they turn 72 they are required to convert to a rrif and have mandatory withdrawals, resulting in both OAS claw backs and large tax implications.

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