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Excess contributionsGenerally, you have RRSP/PRPP/SPP excess contributions if your unused contributions from prior years and your current calendar year contributions are more than your RRSP deduction limit shown on your latest notice of assessment, notice of reassessment, or T1028, Your RRSP Information for 2014, plus $2,000.
The $2,000 is reduced when you have a negative RRSP deduction limit which may be due to a Past Service Pension Adjustment (PSPA) amount. Also, you can only qualify for the additional $2,000 amount if you were 19 or older at any time in 2014. Generally, you have to pay a tax of 1% per month on your unused contributions that exceed your RRSP deduction limit by more than $2,000. Your notice of assessment or notice of reassessment will indicate that you may have to pay a 1% tax on RRSP/PRPP/SPP excess contributions if your unused RRSP/PRPP/SPP contributions exceed your RRSP deduction limit.
Follow the six-step process to determine if you have to complete a T1-OVP, which is the form used to calculate the amount subject to tax and the tax payable. If you determine that you have to pay this 1% tax, you have to file your completed T1-OVP return and pay the tax no later than 90 days after the end of the year in which you had the excess contributions. Penalties Attach your payment to your completed T1-OVP return and submit it to your tax centre. If you do not pay your tax by the deadline, you may also have to pay arrears interest on any unpaid amount. Interest Voluntary
disclosure
For more information, and to see if your disclosure qualifies for this program, see Information Circular IC00-1, Voluntary Disclosures Program. Be sure to indicate clearly, on any disclosure you make, that you are submitting information under the Voluntary Disclosures Program. Waiver of the RRSP
excess contribution tax
To consider your request, we will need a letter from you that explains:
All supporting documents should be included with your letter, such as copies of your RRSP, PRPP, SPP, or RRIF account statements that identify the date you withdrew your excess contributions, as well as any other correspondence that shows that your excess contributions arose due to a reasonable error. For more information on relief from the assessment of late-filing penalties and interest, see Information CircularIC07-1, Taxpayer Relief Provisions. Forms and publications |