Spouse RRSP, need special account?

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Dec 3rd, 2020 4:40 am

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Dec 1st, 2020 10:13 am

grisensko [OP]: Sr. Member; Dec 13, 2006; 615 posts; 310 upvotes

Dec 1st, 2020 10:13 am

Spouse RRSP, need special account?

Hi,

me and my wife both have a RRSP with BMO Investor line. I usually do contribution from a shared bank account and use the BMO Investor Line Tax Information at the end of the year to declare RRSP contribution.

I have a lot of unused RRSP room, and my wife have none. I would like to contribute to her RRSP. Can I simply transfer money in her RRSP account, and at the end of the year deduct it on My tax? or I need a special RRSP account for that?

5 replies

Dec 1st, 2020 10:30 am

hwyc2007: Sr. Member; May 24, 2018; 592 posts; 398 upvotes; Ontario

Dec 1st, 2020 10:30 am

For your scenario, a new *spousal* RRSP for her is required for *you* to make contribution and claim the deduction.

... got me thinking, with the rise of pension income splitting, does spousal RRSP still matter ?

+2

Dec 1st, 2020 3:44 pm

grisensko [OP]: Sr. Member; Dec 13, 2006; 615 posts; 310 upvotes

Dec 1st, 2020 3:44 pm

Thanks

Dec 1st, 2020 10:28 pm

NCR-Manchester: Member; Nov 3, 2008; 295 posts; 225 upvotes; National Capital Reg…

Dec 1st, 2020 10:28 pm

hwyc2007 wrote: ↑ ... got me thinking, with the rise of pension income splitting, does spousal RRSP still matter ?

Yes. RRSP is property (Spousal RRSP legally belongs to the spouse). Pension splitting is just a tax law that can change with government of the day.

+1

Dec 3rd, 2020 12:01 am

Biff88: Deal Addict; Mar 10, 2011; 2421 posts; 569 upvotes; Toronto

Dec 3rd, 2020 12:01 am

hwyc2007 wrote: ↑ ... got me thinking, with the rise of pension income splitting, does spousal RRSP still matter ?

Yes it matters. With a spousal RSP 100% of the income taken out of the RIF is shifted to the spouse. With pension income splitting, only 50% of the income can be split with the spouse. This can be a big difference for couples where one spouse was the main bread winner and the other spouse worked much less or not at all during the couples working life and did not accumulate nearly as much in terms of RSP or DB Pension.

As NCR-Manchester mentioned, pension income splitting could go by the wayside at some point. The Feds are now running an incredibly high $381B deficit and the day will come (after covid 19 is gone) when we will have to pay the piper and taxes will either be raised or tax credits reduced to pay for it. Who knows what that will look like.

+2

Dec 3rd, 2020 4:40 am

cgtlky: Deal Fanatic; Jan 31, 2006; 7669 posts; 2100 upvotes; Toronto

Dec 3rd, 2020 4:40 am

Also remember if you make an spousal RRSP contribution, if your spouse make a withdrawal before 3 years, it will be tax at your hand.

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