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Claiming Jan & Feb RRSP Contributions Partially

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  • Feb 17th, 2021 5:11 pm
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[OP]
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Jun 8, 2019
27 posts
5 upvotes

Claiming Jan & Feb RRSP Contributions Partially

Hi everybody, I have read that for Jan-Feb RRSP contributions can be claimed for current or previous year - for example, Jan-Feb 2021 RRSP contributions can be claimed for 2021 OR 2020 to be part of tax filing for 2020.

My question - is this option to choose as whole? Can I claim Jan & Feb 2021 RRSP Contributions partially i.e. 30% for 2021 70% for 2020?

The reason I'm asking is that if I include all amount from Jan & Feb 2021 into my 2020 tax filing, I would be go over my RRSP contribution room for 2020 (over contributing). Hence, I wonder I can split Jan-Feb contribution to claim.
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Dec 12, 2009
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RRSP contributions made in January and February can be applied retroactively to 2020 or carried forward in whatever amount you choose.
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Yasplz wrote: Hi everybody, I have read that for Jan-Feb RRSP contributions can be claimed for current or previous year - for example, Jan-Feb 2021 RRSP contributions can be claimed for 2021 OR 2020 to be part of tax filing for 2020.

My question - is this option to choose as whole? Can I claim Jan & Feb 2021 RRSP Contributions partially i.e. 30% for 2021 70% for 2020?

The reason I'm asking is that if I include all amount from Jan & Feb 2021 into my 2020 tax filing, I would be go over my RRSP contribution room for 2020 (over contributing). Hence, I wonder I can split Jan-Feb contribution to claim.
Report all of them on your 2020 return.

Deduct any fraction of them of your choice from your 2020 income. The place to do that is on schedule 7. The remainder will be available for you to deduct in 2021 or any later year.

Overcontribution rules go by calendar year. If you're contributing in 2021, even in January or February, it's not an overcontribution as long as you will have 2021 contribution room after your 2020 return is assessed.
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Dec 12, 2009
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bubak wrote: Report all of them on your 2020 return.

Deduct any fraction of them of your choice from your 2020 income. The place to do that is on schedule 7. The remainder will be available for you to deduct in 2021 or any later year.

Overcontribution rules go by calendar year. If you're contributing in 2021, even in January or February, it's not an overcontribution as long as you will have 2021 contribution room after your 2020 return is assessed.
There is also a $2000 over contribution allowance. I am carrying $550 at the moment.
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[OP]
Newbie
Jun 8, 2019
27 posts
5 upvotes
will888 wrote: RRSP contributions made in January and February can be applied retroactively to 2020 or carried forward in whatever amount you choose.
Thank you a lot!
[OP]
Newbie
Jun 8, 2019
27 posts
5 upvotes
bubak wrote: Report all of them on your 2020 return.

Deduct any fraction of them of your choice from your 2020 income. The place to do that is on schedule 7. The remainder will be available for you to deduct in 2021 or any later year.

Overcontribution rules go by calendar year. If you're contributing in 2021, even in January or February, it's not an overcontribution as long as you will have 2021 contribution room after your 2020 return is assessed.
Thank you a lot!
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Oct 2, 2013
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bubak wrote: Overcontribution rules go by calendar year. If you're contributing in 2021, even in January or February, it's not an overcontribution as long as you will have 2021 contribution room after your 2020 return is assessed.
So this mean that if I had say 30k left as of 2019 and I've put 30k in 2020 and that I will be making 100k this year (18% RRSP = 18k) this mean I can put 18k this year until December?
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SquadG wrote: So this mean that if I had say 30k left as of 2019 and I've put 30k in 2020 and that I will be making 100k this year (18% RRSP = 18k) this mean I can put 18k this year until December?
2021 income is used to determine contribution room for 2022. RRSP contribution room is always a year behind.
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will888 wrote: 2021 income is used to determine contribution room for 2022. RRSP contribution room is always a year behind.
I understand but what I mean is when I file my taxes in April and for example it says that I have 10k left that I can contribute to my RRSP, it mean I can put 10k this year + 18% of my current year salary for 2021 ?
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SquadG wrote: I understand but what I mean is when I file my taxes in April and for example it says that I have 10k left that I can contribute to my RRSP, it mean I can put 10k this year + 18% of my current year salary for 2021 ?
When you file taxes in April 2021, it is for the 2020 tax year. That filing will have confirmed earnings for 2020 and RRSP contribution room for 2021 associated with the 2020 income. While you may be of the opinion that you will make $100,000 of RRSP eligible income in 2021, it has not been earned yet and cannot be booked as such. What if your boss generously gives you a 100% raise or what if you get fired? RRSP contribution room is determined after the fact.
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will888 wrote: When you file taxes in April 2021, it is for the 2020 tax year. That filing will have confirmed earnings for 2020 and RRSP contribution room for 2021 associated with the 2020 income. While you may be of the opinion that you will make $100,000 of RRSP eligible income in 2021, it has not been earned yet and cannot be booked as such. What if your boss generously gives you a 100% raise or what if you get fired? RRSP contribution room is determined after the fact.
Ok. I undestand now. Thanks for your time!
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SquadG wrote: Ok. I undestand now. Thanks for your time!
No problem. I should have included the link from the CRA website on RRSP contributions. Notice how it makes reference to prior year income. The site is speaking to the 2020 RRSP contribution as 2021 is in the future and is indeterminate for everyone.

https://www.canada.ca/en/revenue-agency ... limit.html
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will888 wrote: No problem. I should have included the link from the CRA website on RRSP contributions. Notice how it makes reference to prior year income. The site is speaking to the 2020 RRSP contribution as 2021 is in the future and is indeterminate for everyone.

https://www.canada.ca/en/revenue-agency ... limit.html
Thanks.

On my tax file for the year 2019, it says "RRSP deduction limit for 2019: $29 390".
I've put $11 620 in 2019 so my left over after December 31st, 2019 (for the year 2020) is $17 770.
So this mean I do $80 000 (I earned close to that amount in 2020) * 18% + 17 770 = $32 170 and that is my limit for 2020.
In 2020, I've put $28 268 in my RRSP so my theoretical limit for 2021 actually is $3 902 (didn't file my taxes yet).

But it is from my understanding that I could in theory take 18% of my paychecks I get in 2021 and add it to my limit for 2021.

So in other words, for me to reach 100% of my RRSP in 2021 by Dec 31st, 2021 with $0 limit next year, I should do $3 902 / 26 (26 paychecks in 2021) so about ~150$ + 18% of my paycheck in my RRSP.

This mean in 2022, I will only be able to put 18% of each paycheck in my RRSP and I will always be at the limit.

Am I correct?
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SquadG wrote: Thanks.

On my tax file for the year 2019, it says "RRSP deduction limit for 2019: $29 390".
I've put $11 620 in 2019 so my left over after December 31st, 2019 (for the year 2020) is $17 770.
So this mean I do $80 000 (I earned close to that amount in 2020) * 18% + 17 770 = $32 170 and that is my limit for 2020.
In 2020, I've put $28 268 in my RRSP so my theoretical limit for 2021 actually is $3 902 (didn't file my taxes yet).

But it is from my understanding that I could in theory take 18% of my paychecks I get in 2021 and add it to my limit for 2021.

So in other words, for me to reach 100% of my RRSP in 2021 by Dec 31st, 2021 with $0 limit next year, I should do $3 902 / 26 (26 paychecks in 2021) so about ~150$ + 18% of my paycheck in my RRSP.

This mean in 2022, I will only be able to put 18% of each paycheck in my RRSP and I will always be at the limit.

Am I correct?
Once again, the RRSP contribution room is lagging to income by a year. You have to have earned the income for the entire year first before the CRA will give you credit for it. So, the 2021 income determines the 2022 contribution room. 2021 income does not determine 2021 RRSP contribution room. Same time next year, you will be doing 2021 income tax and that will determine your 2022 contribution room using 2021 income. Anway, you have $3902 left to contribute to RRSP for 2021. If you do your taxes regularly, just follow the information on the notice of assessment.
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