Personal Finance

group rrsp - how to file taxes

  • Last Updated:
  • May 19th, 2019 8:10 pm
[OP]
Newbie
May 15, 2019
4 posts

group rrsp - how to file taxes

Hi RFD members

Need your advise on Group RRSP

I have group rrsp option from my employer (cibc). I opted this option for 2018. So im in confusion now on how to file taxes with group RRSP

I deferred my 2018 bonus to 2019 and part of my bonus (lets say X ) went to group RRSP directly with out any tax cuts.
myCRA already has this X amount of RRSP contribution amount

Now im trying to submit my 2018 taxes using simpletax/turbotax and I selected option to import details from myCRA
when I imported, tool also imported X amount of group RRSP and calculating a return on it by considering it as normal RRSP contribution

Should I delete this group RRSP entry from simpletax while submitting the taxes ? As i didnt pay any tax for this X amount of group RRSP, I'm not supposed to get any return right ?

Thanks in advance
10 replies
Deal Expert
Aug 22, 2011
28350 posts
14153 upvotes
Ottawa
Enter the correct contributions manually.
Sr. Member
User avatar
Jan 15, 2017
583 posts
263 upvotes
Remember, there is a difference between an RRSP contribution and an RRSP deduction.

It sounds like you made a contribution of $X which had no tax withheld. You now have to decide how much of that amount you want to claim as a deduction. If you don't claim the entire amount then you'll owe tax on the residual amount. For example:
  • Let's say your bonus was $10,000
  • It was treated as an RRSP contribution and no taxes were withheld
  • Assume you want to deduct $8,000 for 2018. The remaining $2,000 is untaxed income, and will be added to your line 150 (actually, the entire $10,000 is included in this line but there will be a $8,000 deduction on the next page), but you'll also have a carry-forward contribution of $2,000 which you can deduct in future years.
Newbie
May 24, 2018
93 posts
51 upvotes
Ontario
When you say the "2018 bonus is deferred to 2019", do you mean it is paid out in 2019 and $X contributed to your group RRSP in the first 60 days of 2019 ?

If yes & since the bonus is not accounted for on your 2018 T4, is it possible it will be on the 2019 T4 ? I am no expert, only looking at the possibilities.
[OP]
Newbie
May 15, 2019
4 posts
taxrage wrote:
May 17th, 2019 10:18 am
Remember, there is a difference between an RRSP contribution and an RRSP deduction.

It sounds like you made a contribution of $X which had no tax withheld. You now have to decide how much of that amount you want to claim as a deduction. If you don't claim the entire amount then you'll owe tax on the residual amount. For example:
  • Let's say your bonus was $10,000
  • It was treated as an RRSP contribution and no taxes were withheld
  • Assume you want to deduct $8,000 for 2018. The remaining $2,000 is untaxed income, and will be added to your line 150 (actually, the entire $10,000 is included in this line but there will be a $8,000 deduction on the next page), but you'll also have a carry-forward contribution of $2,000 which you can deduct in future years.
Thanks
Couple of Qs
1 -> If I want to deduct all 10,000 for 2018 which I contributed , I should just add this 10,000 as normal RRSP ?
2 -> One thing I dont get still is, I didnt pay any tax for 10,000 bonus, it directly went to group RRSP. When I add this 10,000 in simpletax/turbotax I'm almost getting 5k additional refund. Where this 5k coming from ?
As 10K bonus is not in my total income of 2018 T4. Instead its in box 52 which is Pension Adjustment (As i deferred my bonus to 2019)

If my income is 100k, is it calculating tax on 100K-10K = 90K instead of 100K and Im getting 5k refund from here ? Ideally as I deferred my bonus to next year and bonus is not in 2018 Total income , it shouldnt conisder the 10K deduction right ?
hwyc2007 wrote:
May 17th, 2019 10:34 am
When you say the "2018 bonus is deferred to 2019", do you mean it is paid out in 2019 and $X contributed to your group RRSP in the first 60 days of 2019 ?

If yes & since the bonus is not accounted for on your 2018 T4, is it possible it will be on the 2019 T4 ? I am no expert, only looking at the possibilities.

10K bonus went to Group RRSP, and as I deferred by bonus to 2019, 1Ok is not in total income of 2018 T4, instead its in PA box.
Yes it went into RRSP in first 60 days
Deal Fanatic
Nov 24, 2013
5604 posts
2205 upvotes
Kingston, ON
dineshhnk wrote:
May 17th, 2019 9:07 pm
Thanks
Couple of Qs
1 -> If I want to deduct all 10,000 for 2018 which I contributed , I should just add this 10,000 as normal RRSP ?
2 -> One thing I dont get still is, I didnt pay any tax for 10,000 bonus, it directly went to group RRSP. When I add this 10,000 in simpletax/turbotax I'm almost getting 5k additional refund. Where this 5k coming from ?
As 10K bonus is not in my total income of 2018 T4. Instead its in box 52 which is Pension Adjustment (As i deferred my bonus to 2019)

If my income is 100k, is it calculating tax on 100K-10K = 90K instead of 100K and Im getting 5k refund from here ? Ideally as I deferred my bonus to next year and bonus is not in 2018 Total income , it shouldnt conisder the 10K deduction right ?




10K bonus went to Group RRSP, and as I deferred by bonus to 2019, 1Ok is not in total income of 2018 T4, instead its in PA box.
Yes it went into RRSP in first 60 days
The issue you’re noticing is caused by timing. As the contribution was made in the first 60 days of 2019, you’re eligible to claim the deduction in 2018. If you do so, however, you’ll get a refund for 2018 due to the deduction there. Then, a year from now, that $10k will be income on your 2019 T4, but you will have already used the deduction in 2018 and not have it available anymore, so you’ll owe.

You ultimately have the choice. Either take the refund now and owe next year, or defer the deduction until next year and let it wash. Unless it’ll lower your bracket for 2018 or raise it for 2019, it should net out, other than cash being more useful today than a year from now.


Group RRSP contribution shouldn’t touch your PA box. Do you have something else through the employer that would, like matching contributions to a DPSP or RPP?
Newbie
May 24, 2018
93 posts
51 upvotes
Ontario
Ditto Mike15. Is it DPSP or DPSP+RRSP combo ?

[p.s. any registration number on T4 box 50 ? According to this link, it is possible for DPSP lump sum to be transfered directly to RRSP ]
Last edited by hwyc2007 on May 19th, 2019 4:37 pm, edited 3 times in total.
Sr. Member
User avatar
Jan 15, 2017
583 posts
263 upvotes
dineshhnk wrote:
May 17th, 2019 9:07 pm
Thanks
Couple of Qs
1 -> If I want to deduct all 10,000 for 2018 which I contributed , I should just add this 10,000 as normal RRSP ?
2 -> One thing I dont get still is, I didnt pay any tax for 10,000 bonus, it directly went to group RRSP. When I add this 10,000 in simpletax/turbotax I'm almost getting 5k additional refund. Where this 5k coming from ?
As 10K bonus is not in my total income of 2018 T4. Instead its in box 52 which is Pension Adjustment (As i deferred my bonus to 2019)

If my income is 100k, is it calculating tax on 100K-10K = 90K instead of 100K and Im getting 5k refund from here ? Ideally as I deferred my bonus to next year and bonus is not in 2018 Total income , it shouldnt conisder the 10K deduction right ?

10K bonus went to Group RRSP, and as I deferred by bonus to 2019, 1Ok is not in total income of 2018 T4, instead its in PA box.
Yes it went into RRSP in first 60 days
If it's in the PA box then this sounds like an employer-matched group RRSP contribution. Did you receive $10K from the employer in the group RRSP?

If it's a company pension plan contribution (by you), then there will be no RRSP deduction. Your $10K went straight into the group RRSP, tax-free. It should appear in box 20 as RPP pension contributions.

In this case, there would have been no advantage to deferring the timing of the bonus to 2019...since you chose to have it go straight into the group RRSP.
[OP]
Newbie
May 15, 2019
4 posts
Mike15 wrote:
May 17th, 2019 10:40 pm
The issue you’re noticing is caused by timing. As the contribution was made in the first 60 days of 2019, you’re eligible to claim the deduction in 2018. If you do so, however, you’ll get a refund for 2018 due to the deduction there. Then, a year from now, that $10k will be income on your 2019 T4, but you will have already used the deduction in 2018 and not have it available anymore, so you’ll owe.

You ultimately have the choice. Either take the refund now and owe next year,


Group RRSP contribution shouldn’t touch your PA box. Do you have something else through the employer that would, like matching contributions to a DPSP or RPP?
If i take the refund now, what i will owe next year ? repay this refund ?

Reg PA box, i have asked my employer for breakdown of $
[OP]
Newbie
May 15, 2019
4 posts
taxrage wrote:
May 18th, 2019 10:27 am
Did you receive $10K from the employer in the group RRSP?
Yes I received it in 2nd week of Jan.
taxrage wrote:
May 18th, 2019 10:27 am

If it's a company pension plan contribution (by you), then there will be no RRSP deduction. Your $10K went straight into the group RRSP, tax-free. It should appear in box 20 as RPP pension contributions.
Box 20 is empty in T4 and BOX 52 has some $ and asked employer for breakdown
Deal Fanatic
Nov 24, 2013
5604 posts
2205 upvotes
Kingston, ON
dineshhnk wrote:
May 19th, 2019 11:40 am
If i take the refund now, what i will owe next year ? repay this refund ?

Reg PA box, i have asked my employer for breakdown of $
If you’re in the same tax bracket this year vs next, your refund this year and your owing next year should equal out. $10,000 is a big number though so it could be swinging you one way or another.
dineshhnk wrote:
May 19th, 2019 11:53 am
Yes I received it in 2nd week of Jan.
Box 20 is empty in T4 and BOX 52 has some $ and asked employer for breakdown
If you have no RPP contributions but have a PA, you probably have a DPSP for employer contributions towards your retirement. A DPSP is used similarly to employer “RRSP matching” but it’s not the same as an RRSP so be careful on your taxes. Amounts an employer puts in your DPSP are not taxable income to you but instead trigger a Pension Adjustment that uses up some of your RRSP room. Because it’s not added to your income, you also can’t deduct it from your income as an RRSP contribution and you don’t get an RRSP contribution slip.

The reason I bring this up is if you think the PA amount on your 2018 T4 is this bonus, then you won’t have an RRSP slip for it, and shouldn’t deduct it from your income. CRA would catch that and reassess. If the contribution was made in 2019 though and you did get a slip for it, you’re fine though. Then the 2018 PA is something else (like the sum of regular contributions your employer makes to your DPSP).

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