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RRSPs and Other Registered Plans for Retirement
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1. |
Enter the total of all amounts from box 20 of your 2006 T4 slips, box 32 of your 2006 T4A slips, or from your receipts for union dues that represent RPP contributions |
$ |
______ | 1 |
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2. |
Enter the amount from box 74 or 75 of the "Other information" area of your T4 slip and box 32 of your T4A slip that represents past service contributions made for services that relate to 1989 or earlier years while a contributor or while not a contributor |
− |
______ | 2 |
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3. |
Line 1 minus line 2. This is the amount of your current service and past service contributions for 1990 and later years that you deduct for 2006. Enter this amount on line 31 of Area E |
= |
$ |
3 |
4. |
Enter the total amounts you contributed in 2006 or earlier years for past service contributions while not a contributor |
$ |
______ | 4 |
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5. |
Enter the amount you deducted before 2006 for contributions you entered on line 4 |
− |
______ | 5 |
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6. |
Line 4 minus line 5 |
= |
$ |
6 |
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7. |
Annual deduction limit |
$ |
3,500 | 7 |
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8. |
Number of years* of service to which the contributions on line 4 relate |
______ | × |
$3,500 |
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$ |
______ | 8 |
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9. |
Enter the amount from line 5 |
− |
______ | 9 |
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10. |
Line 8 minus line 9 |
= |
$ |
10 |
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11. |
Enter the amount from line 6, 7, or 10 whichever is less. This is the amount of your past service contributions for 1989 and earlier years for services while not a contributor that you can deduct for 2006. Enter the amount you deduct for 2006 on line 32 of Area E** |
$ |
11 |
12. |
Enter the total amounts you contributed in 2006 or earlier years for past service contributions while a contributor |
$ |
______ | 12 |
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13. |
Enter the amount you deducted before 2006 for contributions you entered on line 12 |
− |
______ | 13 |
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14. |
Line 12 minus line 13 |
= |
$ |
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$ |
14 |
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15. |
Annual deduction limit |
$ |
3,500 |
15 |
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16. |
Enter the amount from line 3 in Area A that you deduct for 2006 |
$ |
______ | 16 |
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17. |
Enter the amount from line 11 in Area B that you deduct for 2006 |
+ |
______ | 17 |
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18. |
Line 16 plus line 17 |
= |
$ |
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− |
$ |
______ | 18 |
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19. |
Line 15 minus line 18 (if negative, enter "0") |
= |
$ |
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$ |
______ | 19 |
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20. |
Enter the amount from line 14 or 19 whichever is less. This is the amount of your past service contributions for 1989 and earlier years for services while a contributor that you can deduct for 2006. Enter the amount you deduct for 2006 on line 33 of Area E** |
$ |
20 |
* "Number of years" includes any portion of a calendar year. (For example, if the contributions relate to service between November 1986 and February 1987, you would enter "2" as the number of years of service.)
** There is no annual deduction limit for deceased individuals. The legal representative can choose to deduct these amounts in the year of death or the year before, or a part in each year, whichever is more beneficial.
21. |
Enter the total amounts in excess of $3,500 that you contributed for current service in any year from 1976 to 1985 |
$ |
______ | 21 |
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22. |
Enter the amount you deducted before 2006 for contributions you entered |
− |
______ | 22 |
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23. |
Line 21 minus line 22 |
= |
$ |
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$ |
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23 |
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24. |
Annual deduction limit |
$ |
3,500 |
24 |
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25. |
Enter the amount from line 3 in Area A that you deduct for 2006 |
$ |
______ | 25 |
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26. |
Enter the amount from line 11 in Area B that you deduct for 2006 |
+ |
______ | 26 |
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27. |
Enter the amount from line 20 in Area C that you deduct for 2006 |
+ |
______ | 27 |
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28. |
Add lines 25 to 27 |
= |
$ |
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− |
$ |
______ | 28 |
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29. |
Line 24 minus line 28 (if negative, enter "0") |
= |
$ |
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$ |
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29 |
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30. |
Enter the amount from line 23 or 29 whichever is less. This is the amount of your excess current service contributions from 1976 to 1985 that you can deduct for 2006. |
$ |
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30 |
31. |
Enter the amount from line 3 in Area A that you deduct for 2006. (If you did not complete Area A, enter "0.") |
$ |
______ | 31 |
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32. |
Enter the part of the amount from line 11 in Area B that you deduct for 2006 |
+ |
______ | 32 |
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33. |
Enter the part of the amount from line 20 in Area C that you deduct for 2006 |
+ |
______ | 33 |
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34. |
Enter the part of the amount from line 30 in Area D that you deduct for 2006 |
+ |
______ | 34 |
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35. |
Add lines 31 to 34. Enter this amount on line 207 of your 2006 return |
= |
$ |
|
35 |
* There is no annual deduction limit for deceased individuals. The legal representative can choose to deduct these amounts in the year of death or the year before, or a part in each year, whichever is more beneficial.
This chapter has general information on contributing to your RRSPs or your spouse's RRSP or common-law partner's RRSP and lists your options if you contribute more than the amount you can deduct. This chapter also applies to you if you want to know how to calculate your 2006 RRSP deduction limit. The rules we explain in this chapter apply to all RRSPs.
Canada Savings Bonds - You can transfer your holdings of past series compound-interest Canada Savings Bonds to your RRSPs or your spouse's RRSP or common-law partner's RRSP. The amount you transfer is considered a contribution to the RRSP. For more information, contact your RRSP issuer.
Foreign property rule - The foreign property limit of 30% you were allowed for foreign property in RRSPs or RRIFs, was cancelled January 1, 2005. This allows more international diversification opportunities for retirement investments.
Self-directed RRSPs - If you want to, you can control the assets of your RRSP and make the investment decisions yourself. Your financial institution can tell you if it offers self-directed RRSPs. The issuer (such as a financial institution or a trust company) can take care of the administrative details, including getting the plan registered, receiving the amounts you contribute, and trading securities. Securities cannot be held in your own name.
Qualified Investments - Investment-grade gold and silver bullion coins and bars, and certificates on these investments, are qualified investments for deferred income plans such as RRSPs and RRIFs. The gold must have a purity of at least 99.5%, and the silver a purity of at least 99.9%. The investment must be acquired either from the producer of the investment or from a regulated financial institution. This is effective since February 23, 2005.
You should pay particular attention to the type of investments you choose for the plan. For more details, read Interpretation Bulletin IT-320, Qualified Investments - Trusts Governed by Registered Retirement Savings Plans, Registered Education Savings Plans and Registered Retirement Income Funds, or contact your financial institution.
Various fees - You cannot claim a deduction for amounts you pay for administration services for an RRSP. Also, you cannot deduct brokerage fees charged to buy and dispose of securities within a trusted RRSP.
On line 208 of your return, you can deduct the RRSP contributions you made up to the limits we explain in the following sections.
Your RRSP issuer will give you an official receipt for the amounts you contributed. If you contributed to your spouse's RRSP or common-law partner's RRSP, the receipt should show your name as the contributor and your spouse's name or common-law partner's name as the annuitant. Attach the receipt(s) with your paper return to support the amount you contributed as well. If you are using EFILE, show your receipts to your service provider, and keep them in case we ask to see them. If you are using NETFILE or TELEFILE, also keep your receipts in case we ask to see them. If you do not get your receipts before the filing deadline, complete and file your return without deducting your contribution. When you get your receipts, see your income tax guide for instructions on how to claim your deduction.
If you deduct an amount for 2006 that you contributed to an RRSP from March 2, 1995, to March 1, 2006, that you had not previously deducted, you should have completed and filed a Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities, that pertained to those contributions. If you did not, you should submit a completed copy of the appropriate Schedule 7, along with the appropriate RRSP receipts, to your tax centre, separate from your 2006 return.
Note
If you made contributions from January 1, 1991, to March 1, 1995, that you did not deduct, and you did not show them on Schedule 7 for 1994, contact us.
The year you turn 69 is the last year that you can make a contribution to your RRSP. You can contribute to an RRSP under which your spouse or common-law partner is the annuitant until the end of the year your spouse or common-law partner turns 69.
This section will help you determine how much of your RRSP contributions you can deduct on line 208 of your 2006 return.
The amount of RRSP contributions that you can deduct for 2006 is based on your 2006 RRSP deduction limit, which appears on your latest Notice of Assessment or Notice of Reassessment, or on Form T1028, RRSP Information for 2006.
You can also deduct amounts for contributions you make for certain income you transfer to your RRSP. The RRSP deduction limit does not include these amounts. For more information on transfers, see Chapter 5, "Transfers to registered plans or funds and annuities."
If we reassess a previous year's return, your revised 2006 RRSP deduction limit will appear on your Notice of Reassessment or in some cases on Form T1028, RRSP Information for 2006. We will also send you Form T1028 with a new RRSP deduction limit if your RRSP deduction limit has changed for reasons other than a reassessment of a previous year's return.
If you do not have a copy of your notice or of Form T1028, you can find out the amount of your RRSP deduction limit by visiting our secure My Account Web site or by calling our automated T.I.P.S. RRSP service. For more information, see "Internet access" and "Tax Information Phone Service (T.I.P.S.)."
Your 2006 RRSP deduction limit is shown on the latest Notice of Assessment or Notice of Reassessment or form T1028 we sent you after we processed your 2005 return. We determined your limit from information on your 2005 and previous year's returns, and from information we keep on record. If any of that information changes, your 2006 RRSP deduction limit may also change. In most cases, we will tell you about any change to your 2006 RRSP deduction limit.
If you want to calculate your 2006 RRSP deduction limit, use the chart below.
Note
The maximum RRSP deduction limit for 2006 is $18,000. However, if you did not use all of your RRSP deduction limit for the years 1991 to 2005, you can carry forward the amount you did not use to 2006. Therefore, your RRSP deduction limit for 2006 may be more than $18,000.
For 2006, you can deduct contributions you made to your RRSP from January 1, 1991, to March 1, 2007. You can deduct these contributions if you did not deduct them for any other year, and if they are not more than your RRSP deduction limit for 2006. Even if you can no longer contribute to your RRSP in 2006 because of your age, you can deduct, up to your RRSP deduction limit, the contributions made in a previous year while your age permitted.
Note
You cannot deduct the interest you paid on money you borrowed to contribute to an RRSP.
The Home Buyers' Plan (HBP) and Lifelong Learning Plan (LLP) - If you participate in the HBP or LLP, you may not be able to deduct, for any year, all or part of the contributions you made to your RRSP during the 89-day period just before you withdrew an amount under either of these plans. To determine the part of the contributions you made to your RRSP that you cannot deduct, see Guide RC4135, Home Buyers' Plan (HBP) or Guide RC4112, Lifelong Learning Plan (LLP) guide, whichever applies.
This section applies to you if you contribute to an RRSP for your spouse or common-law partner. Generally, the total amount you can deduct on line 208 of your 2006 return for contributions you make to your spouse's RRSP or common-law partner's RRSP and your RRSP cannot be more than your 2006 RRSP deduction limit.
Example
Joey's 2006 RRSP deduction limit is $9,500. Joey contributes $4,000 to his RRSP in 2006, and $6,000 to his common-law partner Ghislaine's RRSP in 2006. Joey deducts the $4,000 he contributed to his RRSP on line 208 of his 2006 return. Although Joey contributed $6,000 to his common-law partner's RRSP in 2006, he can only deduct $5,500 of this contribution on his 2006 return ($9,500 - $4,000). He may be able to deduct the remaining $500 on a future year's tax return. To find out what others options are available, see "Unused RRSP contributions".
If you cannot contribute to your RRSP because of your age, you can still contribute to your spouse's RRSP or common-law partner's RRSP until the end of the year they turn 69.
Contributions made after death - No contributions can be made to a deceased individual's RRSP after the date of death. However, the deceased individual's legal representative can make contributions to the surviving spouse's RRSP or common-law partner's RRSP in the year of death or during the first 60 days after the end of that year. Contributions made to a spouse's RRSP or common-law partner's RRSP can be claimed on the deceased individual's return, up to that individual's RRSP deduction limit for the year of death.
Example
Dave died in August 2006. His 2006 RRSP deduction limit is $7,000. Before he died, Dave did not contribute to either his RRSP or his wife's RRSP for 2006. His wife Paula is 66 years old in 2006. On Dave's behalf, his legal representative can contribute up to $7,000 to Paula's RRSP for 2006. The legal representative can then claim an RRSP deduction of up to $7,000 on line 208 of Dave's 2006 final return.
Note
If you contributed amounts to your spouse's RRSP or common-law partner's RRSP in, 2004, 2005, or 2006 you may have to include in your 2006 income all or part of the amount your spouse or common-law partner withdrew in 2006 from his or her spousal or common-law partner RRSP. For more information, see "Amounts from a spousal or common-law partner RRSP or RRIF."
The Home Buyers' Plan (HBP) and Lifelong Learning Plan (LLP) - If your spouse or common-law partner participates in the HBP or LLP, you may not be able to deduct, for any year, all or part of the contributions you made to your spouse's RRSP or common-law partner's RRSP during the 89-day period just before your spouse or common-law partner withdrew an amount under either of these plans. To determine the part of the contributions you made to your spouse's RRSP or common-law partner's RRSP that you cannot deduct, see Guide RC4135, Home Buyers' Plan (HBP) or Guide RC4112, Lifelong Learning Plan (LLP) whichever applies.
Use Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities, to keep track of your RRSP contributions.
If you made contributions to your RRSP or your spouse's RRSP or common-law partner's RRSP from March 2, 2006, to March 1, 2007, and you are not deducting them in total on your 2006 return, attach a completed Schedule 7 to your 2006 return. If you have already filed your return, complete Schedule 7 and send it to your tax centre with your RRSP receipts and a note indicating your name and social insurance number.
For details about how to file Schedule 7, see the section called "Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities," in your income tax guide.
2005 and earlier years - If you made contributions in the first 60 days of 2006 or an earlier year, and you did not claim them in the previous year, you should have completed and filed a Schedule 7 for that previous year. If you did not file a Schedule 7 when it was required, complete one and submit it to your tax centre. By doing so, you will avoid having your deduction for contributions made in the first 60 days of the year, or in an earlier year, reduced or disallowed. If you have not already filed your RRSP receipts, submit them with your Schedule 7. If you did not receive a copy of Schedule 7 with your income tax and benefit package, you can download and print it by selecting the link above or you can get a printed copy by calling us at 1-800-959-2221.
Note
You may have to pay a tax on contributions that you did not deduct for the year you contributed them or for the previous year. For more information, see "Tax on RRSP Excess Contributions."
The line numbers in brackets refer to the line numbers on your 2005 return. |
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Step 1 - Calculating your unused RRSP deduction room at the end of 2005 |
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1. |
Enter your RRSP deduction limit for 2005* |
$ |
______ | 1 |
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2. |
Enter the total RRSP contributions you deducted on line 208, and Saskatchewan Pension Plan contributions you deducted on line 209. (do not include amounts you deducted for transfers of payments or benefits to an RRSP, or the excess amount you withdrew from your RRSP in connection with the certification of a provisional past service pension adjustment (PSPA) that you recontributed to your RRSP in 2005) |
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______ |
|
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3. |
Line 1 minus line 2. This is your unused RRSP deduction room at the end of 2005. This amount can be negative, report this on line 39. |
= |
$ |
|
3 |
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Step 2 - Calculating your 2005 earned income (include each amount only once in this step)** |
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4. |
Total of lines 101 and 104 on your return |
$ |
______ | 4 |
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5. |
Royalties for a work or invention that you authored or invented (line 104) |
|
______ |
|
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6. |
Net research grants you received (line 104) |
+ |
______ | 6 |
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7. |
Employee profit sharing plan allocations (line 104) |
+ |
______ | 7 |
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8. |
Unemployment benefit plan payments (line 104) |
+ |
______ | 8 |
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9. |
Add lines 5 to 8 |
= |
$ |
|
− |
______ | 9 |
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10. |
Line 4 minus line 9 |
= |
$ |
|
10 |
||||||||
11. |
Annual union, professional, or like dues (line 212) that relate to the employment earnings you reported on line 4 above |
|
______ |
|
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12. |
Employment expenses (line 229) that relate to the employment earnings you reported on line 4 above |
|
______ |
|
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13. |
Line 11 plus line 12 |
= |
$ |
|
− |
______ | 13 |
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14. |
Line 10 minus line 13 (if negative, enter "0") |
= |
$ |
|
$ |
______ | 14 |
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15. |
Amount from line 9 above |
+ |
______ | 15 |
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16. |
Net income from a business you carried on alone or as an active partner (lines 135 to 143) |
|
______ |
|
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17. |
Disability payments you received from the CPP or Quebec Pension Plan (line 152) |
+ |
______ | 17 |
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18. |
Net rental income from real property (line 126). Enter losses on line 23 below |
+ |
______ | 18 |
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19. |
The total taxable support payments you received in 2005. Also, the support payments you previously paid and deducted for the year in which you paid them but that were later repaid to you and that you included as income for 2005 (line 128) |
|
______ |
|
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20. |
Add lines 14 to 19 |
= |
$ |
|
20 |
||||||||
21. |
Current-year loss from a business you carried on alone or as an active partner (lines 135 to 143) |
$ |
______ | 21 |
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22. |
Amount included on line 16 above that represents the taxable portion of gains on the disposition of eligible capital property |
|
______ |
|
|||||||||
23. |
Current-year rental loss from real property (line 126) |
+ |
______ | 23 |
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24. |
Enter the total deductible support payments you made in 2005, and the support payments you received and included as income for the year in which you received them that you later repaid in 2005 or the previous two years and deducted for 2005 (line 220) |
+ |
______ |
|
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25. |
Add lines 21 to 24 |
= |
$ |
|
25 |
||||||||
26. |
Line 20 minus line 25. This amount is your 2005 earned income |
= |
$ |
|
26 |
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* If you had a net PSPA in 2005 or a previous year and your 2005 RRSP deduction limit is "0," leave lines 1 and 2 in Step 1 blank and enter your unused RRSP deduction room at the end of 2005 on line 3. This amount may be negative. ** Certain income you earned in 2005 while you were a non-resident of Canada qualifies as earned income. To find out the types of income that qualify, contact the International Tax Services Office at one of the following telephone numbers: calls within the Ottawa area 613-952-3741; calls from other areas in Canada or the U.S. (including Alaska and Hawaii) 1-800-267-5177; calls from outside Canada and the U.S. 613-952-3741 (call collect). For more information on residency, see Interpretation Bulletin IT-221, Determination of an Individual's Residence Status. |
Step 3 - The 2006 RRSP dollar limit |
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27. |
Enter the amount from line 26 |
$ |
______ | × |
18% |
= |
$ |
|
27 |
|||
28. |
RRSP dollar limit for 2006 |
$ |
18,000 |
28 |
||||||||
29. |
Enter the amount from line 27 or 28, whichever is less |
= |
$ |
|
29 |
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Step 4 - Your 2005 pension adjustment (PA) |
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30. |
Enter your 2005 PA (the total from box 52 of your 2005 T4 slips and box 34 of your 2005 T4A slips)*** |
|
______ |
|
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31. |
Line 29 minus line 30 (if negative, enter "0") |
= |
$ |
|
31 |
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Step 5 - Your 2006 pension adjustment reversal (PAR) |
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32. |
Enter your PAR (the total from box 2 of your 2006 T10 slips) |
+ |
$ |
______ | 32 |
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33. |
Line 31 plus line 32 (enter amount on line 40) |
= |
$ |
|
33 |
|||||||
Step 6 - Your 2006 net past service pension adjustment (PSPA) |
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34. |
Enter your exempt PSPA for 2005 (the total from box 2 of your T215 slips) |
$ |
______ | 34 |
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35. |
Enter your certified PSPA for 2006 (line A in Part 3 of Form T1004, Applying for the Certification of a Provisional PSPA) |
|
______ |
|
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36. |
Line 34 plus line 35 |
= |
$ |
______ | 36 |
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37. |
Enter your qualifying withdrawals for 2006 (Part 3 of Form T1006, Designating an RRSP Withdrawal as a Qualifying Withdrawal) |
|
______ | 37 |
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38. |
Line 36 minus line 37. This amount is your 2006 net PSPA (can be negative)(enter amount on line 42). |
= |
$ |
|
38 |
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Step 7 - Your 2006 RRSP deduction limit |
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39. |
Enter your 2005 unused RRSP deduction room from line 3 in Step 1 |
$ |
______ | 39 |
||||||||
40. |
Enter the amount from line 33 |
+ |
______ | 40 |
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41. |
Line 39 plus line 40 |
= |
$ |
______ | 41 |
|||||||
42. |
Enter your 2006 net PSPA from line 38 |
− |
______ | 42 |
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43. |
Line 41 minus line 42. This amount is your 2006 RRSP deduction limit (if negative, enter "0") |
= |
$ |
|
43 |
|||||||
Step 8 - Your 2006 unused RRSP deduction room |
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44. |
Enter the amount from line 41 |
$ |
______ | 44 |
||||||||
45. |
Enter the amount from line 42 (this amount can be negative) |
− |
______ | 45 |
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46. |
Line 44 minus line 45 (this amount can be negative) |
= |
$ |
______ | 46 |
|||||||
47. |
Enter the amount of RRSP contributions you deduct on line 208 of your 2006 return (cannot be more than the amount on line 43). Do not include amounts that you deduct for transfers of payments or benefits to an RRSP, or for the excess amount you withdrew from your RRSP in connection with the certification of a provisional PSPA that you recontributed to your RRSP in 2006**** |
− |
______ | 47 |
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48. |
Line 46 minus line 47. This amount is your 2006 unused RRSP deduction room that you can carry forward to 2007 (this amount can be negative) |
= |
$ |
|
48 |
|||||||
*** If you are a "connected person," you may have to enter an amount on line 30 in addition to amounts from your T4 or T4A slips. If this applies to you, your employer will give you Form T1007, Connected Person Information Return. For more information on connected persons, see Interpretation Bulletin IT-124, Contributions to Registered Retirement Savings Plans. **** If you contributed to the Saskatchewan Pension Plan during 2006, include the amount you deduct on line 209 of your 2006 return, on line 47 of this chart. |
This section applies to you if you did not use all of your RRSP contributions as a deduction in the year you made them or in the preceding year. It does not apply to contributions that were repayments under the Home Buyers' Plan or the Lifelong Learning Plan. Your unused RRSP contributions from previous years will be on your RRSP Deduction Limit Statement shown on your latest Notice of Assessment, Notice of Reassessment or form T1028. To report new unused contributions, you have to file Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities, with your return. For more information, see "Keeping track of your RRSP contributions - Schedule 7."
If you did not deduct all of the contributions you made to your RRSP or your spouse's RRSP or common-law partner's RRSP in 1991 and later years, you have two options: the unused contributions can be left in the plan, or they can be withdrawn. In either case, a tax may apply to the unused contributions. For more information, see "Tax on RRSP Excess Contributions".
If the unused contributions are withdrawn, you have to include them as income on your return. However, you may be able to deduct an amount equal to the withdrawn contributions that you include in your income, if you or your spouse or common-law partner received the unused RRSP contributions from an RRSP or RRIF:
You can deduct the amount if you meet all of the following conditions:
In addition, it has to be reasonable for us to consider that one of the following applies:
Note
If you or your spouse or common-law partner receives a payment for unused RRSP contributions you made and you deduct an amount on line 232 of your return under the above rules, we do not consider the unused RRSP contributions to be RRSP contributions after you or your spouse or common-law partner receives the payment. Accordingly, you cannot deduct the amount for any year.
Withdrawal made using Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in ___ - If you meet all of the preceding conditions and have not already withdrawn the unused contributions made in 1991 and later years, you can withdraw them without having tax withheld. To do this, complete Form T3012A. This form cannot be used to withdraw unused RRSP contributions that were transferred to a RRIF. To make a withdrawal from a RRIF, see " Withdrawal made without Form T3012A" below.
If the unused RRSP contributions are withdrawn based on a Form T3012A we approved, do the following:
Withdrawal made without Form T3012A - If you withdraw unused RRSP contributions without Form T3012A, the issuer of the plan has to withhold tax. The amount you withdraw should be reported on line 129 of your return if it appears in box 22 of the T4RSP slip. If the amount appears in box 16 of the T4RIF slip and you were 65 years or older at the end of December 2006, report it on line 115. Otherwise, report the amount on line 130.
In either case, claim the tax the issuer withheld on line 437 of your return. Complete Form T746, Calculating Your Deduction for Refund of Unused RRSP Contributions, to calculate the amount you can deduct for the withdrawal.
Generally, you made excess contributions to an RRSP under which you or your spouse or common-law partner is the annuitant 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 Form T1028 plus $2,000. The $2,000 is reduced when you have a negative RRSP deduction limit which may be due to the Past Service Pension Adjustment (PSPA) amount. In addition, if you were younger than 18 years of age at any time during the year, you do not qualify for the additional $2,000 amount.
A tax of 1% per month may apply to certain excess contributions you made in 1991 and later years that are left in the plan. However, if your unused contributions resulted from mandatory group RRSP contributions or from contributions that you made before February 27, 1995, you may not have to pay this 1% tax on all your unused contributions. Follow the six-step process described in the chart on this page to determine if you have to complete a T1-OVP, 2006 Individual Tax Return for RRSP Excess Contributions, 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 pay it no later than 90 days after the end of the year in which the unused contributions exist.
Attach your payment to the completed T1-OVP 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.
Which return do you have to use?
Note:
Mandatory contributions to a group RRSP are generally made according to the terms of the group RRSP that states the employee must contribute a percentage of their gross salary to an RRSP.
Do You Have to Complete a 2006 T1-OVP Return?
|
|
Situation |
Action |
---|---|
Step 1 - Does one of these situations apply to you?
|
|
Step 2 - Is your 2006 RRSP deduction limit from your latest Notice of Assessment, Notice of Reassessment or from your Form (T1028), RRSP information for 2006 more than the total of your unused RRSP contributions (including gifts) made from January 1, 1991, to December 31, 2005, plus the total of any RRSP contributions (including gifts) made during 2006? |
|
Step 3 - Were you younger than 18 years old at any time in 2006? |
|
Step 4 - Are your unused RRSP contributions (including gifts) made from January 1, 1991 to December 31, 2006, less than the total of your 2006 RRSP deduction limit from your latest Notice of Assessment or Notice of Reassessment plus $2,000? |
|
Step 5 - Do any of these situations apply to you?
|
|
Step 6 - Were all the unused contributions mandatory contributions made in 2006 as a result of your participation in a group RRSP? |
|
This chapter provides general information about RRIFs and lists the types of payments you can contribute to your RRIF. Usually, you can only contribute to your RRIF by directly transferring certain types of payments you receive or are considered to have received.
You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs. For more information, see "Self-directed RRSPs."
You can contribute to your RRIF by having property transferred directly from:
In addition, you can contribute to your RRIF any amount up to the eligible amount of the designated benefit you receive or are considered to have received from the deceased annuitant's RRSP in the following situations:
You can contribute to your RRIF by directly transferring a lump-sum payment from:
Note
In some cases, the Income Tax Act limits how much can be transferred without tax consequences. For more information, see "Direct transfer of an excess RPP lump-sum payment."
Under proposed legislation, you will be able to contribute to your RRIF by directly transferring a lump-sum payment from:
Note
Contributions made by you to your DPSP may not be transferred to your RRIF. For exceptions to the direct transfer requirement and other rules, see Interpretation Bulletin IT-528, Transfers of Funds Between Registered Plans.
You can contribute to your RRIF by directly transferring property from:
In addition, you can contribute to your RRIF any amount up to the eligible amount of the designated benefit you receive or are considered to have received from the deceased annuitant’s RRIF in the following situations:
For more information, see Information Sheet RC4178, Death of a RRIF Annuitant, or Form T1090, Death of a RRIF Annuitant – Designated Benefit.
If you are a member of the SPP, you can contribute to your RRIF by directly transferring a lump-sum payment from the SPP.
You can also transfer a lump-sum payment from the SPP if you are entitled to it because your current or former spouse or common-law partner was a member of the SPP, and one of the following situations applies:
For more information on transfers, see Chapter 5, "Transfers to registered plans or funds and annuities."
If you have an RRSP or a RRIF, you generally have a certain amount of flexibility on the types of payments you can get from these plans.
Generally, an RRSP must mature by the last day of the year in which you turn 69. On maturity, the funds must either be withdrawn, transferred to a RRIF, or used to purchase an annuity. No tax is withheld on amounts transferred to a RRIF or used to purchase an annuity. However, if funds are withdrawn from your RRSP, tax will be withheld and the amount withdrawn has to be included in your income for the year in which it is withdrawn.
The following charts contain information on amounts you can receive or that we consider you to receive from your RRSP or RRIF, or from a deceased individual's RRSP or RRIF. This chapter also provides information on spousal or common-law partner RRSP and RRIF.
Chart 1 - Amounts From Your RRSP or RRIF
|
||
Description of amount |
Information slip and box number |
Will tax be withheld? |
---|---|---|
Withdrawal from an RRSP - You can withdraw amounts from your RRSP before it starts to pay you a retirement income. If your spouse or common-law partner contributed to your RRSP, see Note 1 below. |
T4RSP - Box 22 |
Yes
|
You can withdraw unused contributions you made to an RRSP based on an approved Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in ____. If you transferred the unused contributions to your RRIF, see Note 2 below. | T4RSP - Box 20 |
No |
Annuity payments from an RRSP - When an RRSP matures, you can draw an annuity from that RRSP. You have to include the payments in your income. If you receive the annuity payments because your spouse or common-law partner died, or if you were 65 or older on December 31, 2006, the payments qualify for the pension income amount. In addition to receiving a retirement income out of your RRSP, you can also choose to transfer the property to a RRIF or to buy yourself an eligible annuity. The value of all the property the plan holds is included in your income unless you draw an annuity from the matured RRSP, use the RRSP to buy yourself an eligible annuity, or transfer the funds to a RRIF. For more information about the pension income amount, see line 314 in your income tax guide. |
T4RSP - Box 16 |
No |
Commutation payments from an RRSP - A commutation payment is a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan. If your spouse or common-law partner contributed to your RRSP, see Note 1 below. |
T4RSP - Box 22 |
Yes |
Minimum amount from a RRIF - Starting in the year after the year you establish a RRIF, you have to be paid a yearly minimum amount. The payout period under your RRIF is for your entire life. Your carrier calculates the minimum amount based on your age at the beginning of each year. However, you can elect to have the payment based on your spouse or common-law partner's age. You must select this option when filing out the original RRIF application form. Once you make this election, you cannot change it. If you want more information, contact your carrier. |
T4RIF - Box 16 |
No |
Excess amount from a RRIF - In any year, you can be paid more than the minimum amount for that year. Amounts paid to you from a RRIF in a year that are more than the minimum amount for that year are called excess amounts. Check with your carrier to make sure that your RRIF allows such payments. Under certain circumstances, you can directly transfer the excess amount from a RRIF. For more information, see "Excess amount from a RRIF" in chart 5. The excess amount shown in box 24 of your T4RIF slip is for information purposes only. Only include the amount shown in box 16 on your return. If you received the excess amount from your spousal or common-law partner RRIF, see Note 1. |
T4RIF - Box 16 |
Yes |
Amounts deemed received on deregistration of an RRSP or a RRIF - If in 2006 your RRSP or RRIF was changed and it no longer satisfies the rules under which it was registered, it is no longer an RRSP or a RRIF. It is now an amended plan or fund. In such a case, we consider you to have received in 2006 an amount that equals the fair market value of all the property the plan or fund held at the time it ceased being an RRSP or a RRIF. If the deregistration was from your spousal or common-law partner RRSP or RRIF, see Note 1 below. |
T4RSP - Box 26 T4RIF - Box 20 |
|
Other income and deductions from an RRSP or a RRIF - You may have to include other RRSP or RRIF amounts in your income, or you may be able to deduct other amounts for 2006. This applies if, in 2006, your RRSP or RRIF trust holds at any time a non-qualified investment or disposed of a non-qualified investment. It also applies if trust property was used as security for a loan, sold for an amount less than its fair market value, or the trust acquired property for an amount more than its fair market value. If the amount in box 28 of your T4RSP slip or in box 22 of your T4RIF slip appears in brackets (negative amount), claim it on line 232 of your return. |
T4RSP - Box 28 T4RIF - Box 22 |
No |
If the RRSP from which you receive the withdrawal or commutation payment in 2006 is a spousal or common-law partner RRSP, or the RRIF from which you receive excess amounts in 2006 is a spousal or common-law partner RRIF, and your spouse or common-law partner made contributions to any of your RRSPs in 2004, 2005, or 2006, your spouse or common-law partner may have to include in income all or part of the amount received. For more information, see "Amounts from a spousal or common-law partner RRSP or RRIF." |
|||
If, in 1991 or a later year, you made contributions to your RRSP or to your spouse's RRSP or common-law partner's RRSP that you did not deduct for any year and those funds are transferred from that RRSP to a RRIF, you may be allowed a deduction for amounts you or your spouse or common-law partner withdraws from that RRIF for those unused RRSP contributions. Claim this deduction on line 232 of your return. For more information, see "Unused RRSP contributions." |
|||
Tax will be withheld only if the amount is paid in the year of deregistration. |
Chart 2 - Amounts From a Deceased Annuitant's RRSP
In all cases, tax will not be withheld. Report the amount on line 129 of the return.
Description of amount | T4RSP box number | Slip issued in the name of, and to be reported by: |
---|---|---|
If the surviving spouse or common-law partner is:
|
16 | surviving spouse or common-law partner |
If the surviving spouse or common-law partner is:
|
16 | surviving spouse or common-law partner |
For all other beneficiaries - Annuity payments from an RRSP registered after June 29, 1978, that are to be paid to a beneficiary other than the RRSP annuitant's surviving spouse or common-law partner, have to be commuted. This commutation payment is not taxable in the beneficiary's hands. The fair market value of the property the RRSP held at the time of the annuitant's death is included in the deceased annuitant's income for the year of death. The amount reported on the deceased annuitant's final return may be reduced if, at the time of death, you were a financially dependent child or grandchild of the annuitant, and an amount is paid from the RRSP to you or to the estate of which you are a beneficiary. For deaths that occurred before 1999, this only applies if there was no surviving spouse (according to the definition of this term in 1999 or earlier) at the time of death. For more information, see Information Sheet RC4177, Death of an RRSP Annuitant, and Form T2019, Death of an RRSP Annuitant - Refund of Premiums. |
34 | deceased annuitant |
Income earned in the RRSP after the annuitant dies that the beneficiary receives. | 28 | beneficiary |
Income earned in the RRSP after the annuitant dies that the estate receives. | 28 | estate |
Description of amount | T4RSP box number | Slip issued in the name of, and to be reported by: |
---|---|---|
Transfer to the surviving spouse or common-law partner (named as beneficiary in the RRSP contract) - If, before the end of the year following the year of death of the annuitant, all of the property the RRSP held is paid to you as the deceased annuitant's spouse or common-law partner (as specified in the RRSP contract), and that payment is directly transferred to your RRSP, claim a deduction equal to the amount transferred to your RRSP on line 208 of your return. If the amount is directly transferred to your RRIF or directly transferred to an issuer to buy yourself an eligible annuity, claim a deduction equal to the amount transferred on line 232 of your return. | 18 | surviving spouse or common-law partner |
For all other situations - The fair market value of the property the RRSP held at the time of death is included in the deceased annuitant's income for the year of death. | 34 | deceased annuitant's final return |
The amount reported on the deceased annuitant's final return may be reduced if:
|
18 or 28 | surviving spouse or common-law partner or estate |
The amount reported on the deceased annuitant's final return may be reduced if:
|
28 | child/grandchild or estate |
Income earned in the RRSP after the annuitant dies that the beneficiary receives. | 28 | beneficiary |
Income earned in the RRSP after the annuitant dies that the estate receives. | 28 | estate |
Chart 3 - Amounts From a Deceased Annuitant's RRIF
|
||
Description of amount | T4RIF box number | Slip issued in the name of, and to be reported by: |
---|---|---|
Spouse or common-law partner is designated as the new annuitant - If the RRIF annuitant made a written election in the RRIF contract or in the will to have the RRIF payments continue to the spouse or common-law partner after death, the surviving spouse or common-law partner becomes the annuitant after death and will begin to get the RRIF payments as the new annuitant. The spouse or common-law partner can become the annuitant of the RRIF after the deceased annuitant's death, even if the deceased annuitant did not make this election in the RRIF contract or in the will. This is the case if the legal representative consents to the spouse or common-law partner becoming the annuitant, and if the RRIF carrier agrees to continue the payments under the deceased annuitant's RRIF to the surviving spouse or common-law partner. |
16 | surviving spouse or common-law partner |
Spouse or common-law partner is designated as beneficiary of the RRIF - If, before the end of the year following the year of death of the annuitant, all of the property the RRIF held is paid to you (as specified in the RRIF contract) as the deceased annuitant’s spouse or common-law partner and the eligible amount of that payment is directly transferred to your RRSP, claim a deduction equal to the amount transferred on line 208 of your return. If the amount is directly transferred to your RRIF or directly transferred to an issuer to buy an eligible annuity, claim a deduction equal to the amount transferred on line 232 of your return. The eligible amount of the payment is shown in box 24 of your T4RIF slip, and this is the maximum amount that can be directly transferred. | 16 and 24 | surviving spouse or common-law partner |
For all other situations - On line 130 of the deceased annuitant's final return, include the fair market value of the property the RRIF held at the time of death. | 18 | deceased annuitant's final return |
The amount reported on the deceased annuitant's final return may be reduced if the following condition applies:
|
16 or 22 | surviving spouse or common-law partner or estate |
The amount reported on the deceased annuitant's final return may be reduced if the following condition applies:
|
22 | child/grandchild or estate |
Income earned in the RRIF after the annuitant dies that the beneficiary receives. | 22 | beneficiary |
Income earned in the RRIF after the annuitant dies that the estate receives. |
22 | estate |
A locked-in RRSP is a plan containing funds transferred from a registered pension plan (RPP) for a member of the RPP. Under the pension laws of certain provinces, locked-in RRSPs are sometimes called locked-in retirement accounts (LIRAs). This means that the member cannot receive the transferred funds. They either have to stay in the RPP or be transferred to a locked-in RRSP to provide the member with a retirement income.
You cannot withdraw funds from a locked-in RRSP. The money has to stay in the RRSP and will be used to buy a life annuity at retirement age.
Note:
You may be able to withdraw funds from a locked in RRSP under special circumstances. Contact your RRSP issuer.
However, under the pension laws of certain provinces, pension funds or funds from a locked-in RRSP can be transferred to a locked-in RRIF. These locked-in RRIFs are sometimes called life income funds (LIFs) or locked-in retirement income funds (LRIFs).
Your employer or pension plan administrator can answer any questions you have about locked-in funds.
Note
Do not confuse locked-in RRSPs with fixed-term investments in an RRSP. A fixed-term investment, such as a guaranteed investment certificate, can have a locked-in interest rate for the term of the certificate.
This section applies to you if you receive income from a spousal or common-law partner RRSP or a spousal or common-law partner RRIF. This section may also apply to you if you contributed to your spouse's RRSPs or common-law partner's RRSPs.
A spousal or common-law partner RRSP is any of your RRSPs:
A spousal or common-law partner RRIF is any of your RRIFs:
If you contributed to any spousal or common-law partner RRSPs in 2004, 2005, or 2006, you may have to include in your 2006 income all or part of:
To determine the amount to include in your income or your spouse's income or common-law partner's income, your spouse or common-law partner (the annuitant) should complete Form T2205, Amounts From a Spousal or Common-Law Partner RRSP or RRIF to Include in Income for ____.
Tax Tip
If you want to ensure that you do not have to include any amount in your income when your spouse or common-law partner withdraws funds from a spousal or common-law partner RRSP or spousal or common-law partner RRIF, make sure you have not contributed to any spousal or common-law partner RRSPs in the year your spouse or common-law partner withdraws the funds, or in either of the two preceding years. Otherwise, you (the contributor) will probably have to include in your income the funds your spouse or common-law partner (the annuitant) withdraws.
Example
In May 2004, Joshua started contributing to his wife Keri's RRSPs. He contributed the following amounts to her RRSPs:
Year | Amount |
---|---|
2004 |
$2,000 |
2005 |
2,000 |
2006 |
+1,000 |
Total |
$5,000 |
In 2006, Keri withdrew $4,000 from her spousal RRSPs. Before 2006, she had not withdrawn any amounts from her spousal RRSPs.
Keri determines that Joshua has to include $4,000 in his income on line 129 of his 2006 return, since the amount Joshua has to include as income is the lesser of:
Keri does not include any amount in her income for this withdrawal.
Exceptions - The rule that requires you, the contributor, to include certain amounts from spousal or common-law partner RRSPs or spousal or common-law partner RRIFs as income does not apply to the following situations:
In any such case, the annuitant spouse or common-law partner includes the payment in income for the year he or she receives it or is considered to have received it.
Tax deducted - In all cases, the tax deducted has to be claimed by the individual to whom the slip is issued. In most cases, the information slip issued for the withdrawal will be in the name of the annuitant. However, report the income according to the calculations completed in Parts 1 and 2 of Form T2205.
You can transfer certain types of payments to an RPP, an RRSP, a RRIF, or a deferred profit sharing plan (DPSP). You can also use certain payments from an RRSP or a RRIF to buy yourself an eligible annuity.
You have to transfer certain payments directly. For other payments, you can transfer them either directly or indirectly. This chapter provides information about the rules on these transfers.
The three charts in this chapter list the most common types of payments that you can transfer and the types of plans or funds to which you can transfer them. Chart 4 covers payments that you can transfer either directly or indirectly. Chart 5 covers payments that you have to transfer directly. Chart 6 covers payments that you transfer because of the breakdown of your relationship.
Note
If you are a non-resident of Canada, see Form NRTA1, Authorization for Non-Resident Tax Exemption, for more information on transfers.
Since 2004 you have been able to transfer an amount directly from your RRIF to a money purchase provision of an RPP under which you were a member before the transfer.
Since 1998, investment earnings in an RESP can be paid out to an individual other than the beneficiary. These payments are called accumulated income payments (AIP) and are taxed at the individual's tax rate and an additional 20% tax is applied to these payments.
However, you can reduce the AIP subject to both taxes if you are the original subscriber or the spouse or common-law partner of the deceased original subscriber (if there is no other subscriber) and you meet both of the following conditions:
You cannot reduce the AIPs subject to tax if you became a subscriber because of the death of the original subscriber.
For more information, see Information Sheet RC4092, Registered Education Savings Plans (RESPs).
Depending on the source of income, the following payments can also be transferred to your RPP or RRSP:
For more information on these types of transfers, see Interpretation Bulletin IT-500, Registered Retirement Savings Plans - Death of an Annuitant, or IT-528, Transfers of Funds Between Registered Plans. For information on how to report the income, see your income tax and benefit guide.
Chart 4 - Payments That You Can Transfer Directly or Indirectly
|
|||||
Type of payment |
Can be transferred to your: |
Instructions |
|||
---|---|---|---|---|---|
RPP |
RRSP |
RRIF |
Annuity |
||
Yes |
Yes |
No |
No |
Note |
|
Amounts paid from an RRSP or RRIF upon death of the annuitant |
No |
Yes |
Yes |
Yes |
Deaths after 1998 - If, at the time of death, you are the deceased annuitant's spouse or common-law partner, or you are a financially dependent child or grandchild of the annuitant because of a physical or mental infirmity, you can transfer tax free certain amounts paid from the annuitant's RRSP or RRIF. If you are not financially dependent because of a physical or mental infirmity, you can only transfer the amounts to a term annuity. If the death occurred before 1999, a financially dependent child or grandchild may be able to transfer the amounts only if, at the time of death, the deceased annuitant had no spouse (according to the definition of this term in 1999 or earlier). For more information on these transfers, see Information Sheets RC4177, Death of an RRSP Annuitant, and RC4178, Death of a RRIF Annuitant. No tax is withheld at source on these payments. For more details, see "Chart 2 - Amounts From a Deceased Annuitant's RRSP" or "Chart 3 - Amounts From a Deceased Annuitant's RRIF." |
Chart 5 - Payments That You Have to Transfer Directly
|
||||||
Type of payment |
Can be transferred to your: |
Instructions |
Form* |
|||
---|---|---|---|---|---|---|
RPP |
RRSP |
RRIF |
Annuity |
|||
RPP lump sum |
Yes |
Yes |
Yes |
No |
|
|
DPSP lump sum |
Yes |
Yes |
Yes ** |
No |
|
|
RRSP commutation payment |
No |
Yes |
Yes |
Yes |
|
|
Property from an unmatured RRSP |
Yes |
Yes |
Yes |
No |
|
|
Property from |
Yes |
No |
Yes |
No |
|
|
No |
Yes |
Yes |
Yes |
|
T2033 |
|
Saskatchewan Pensionn Plan (SPP) lump-sum payment |
No |
Yes |
Yes |
Yes |
|
|
* You can find the form titles in the References section. |
Chart 6 - Payments That You Transfer Directly Because of the Breakdown of Your Relationship
|
||||||
Type of payment |
Can be transferred to your: |
Instructions |
Form* |
|||
---|---|---|---|---|---|---|
RPP |
RRSP |
RRIF |
Annuity |
|||
RPP lump sum payment |
Yes |
Yes |
Yes |
No |
![]() |
|
DPSP lump sum payment |
Yes ** |
Yes ** |
Yes ** |
No |
![]() |
|
Property from an unmatured RRSP |
No |
Yes *** |
Yes |
No |
|
|
Property from a RRIF |
No |
Yes |
Yes |
No |
![]() |
|
Saskatchewan Pension Plan lump-sum payment |
No |
Yes |
Yes |
Yes |
|
|
* You can find the form titles in the References section. |
In most cases, if you transfer an RPP lump-sum payment directly to another RPP, to an RRSP, or to a RRIF, you do not have to include any part of the payment in your income, and you cannot deduct it. However, the Income Tax Act limits how much you can transfer directly to such registered plans or funds without having to include an amount in your income. If the amount you transfer is more than the limit, you have to include the excess transfer in your income. Your T4A slip shows the excess transfer as pension income in box 18, which you report on line 130 of your return.
If you made the excess transfer to your RRSP for 2006, we consider you to have contributed it to the RRSP in the year in which you transfer it. Even if the excess transfer is made to your RRIF, we still consider you to have contributed it to your RRSP. In both cases, the carrier will give you an official RRSP receipt for this contribution.
You can deduct these RRSP contributions on line 208 of your return, up to your RRSP deduction limit for the year in which you made the transfer. If you cannot deduct the contributions because they are more than your RRSP deduction limit for the year, you can leave them in your RRSP or your RRIF and deduct them for future years up to your RRSP deduction limit for those years, or you can withdraw them if they are not locked in.
Note
You may be subject to the 1%-per-month tax on unused RRSP contributions during the period these contributions stay in the RRSP or the RRIF. For more information, see "Tax on RRSP Excess Contributions."
Withdrawal from an RRSP or a RRIF - If you withdraw funds from an RRSP or a RRIF in 2006 and we consider you to have contributed an excess transfer to your RRSP, a deduction is available if you meet both of the following conditions:
You can use Form T1043, Deduction for Excess Registered Pension Plan Transfers You Withdrew From an RRSP or RRIF, to calculate your deduction. Deduct the amount on line 232 of your return.
Note
You cannot use Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in ____ to withdraw unused contributions in respect of an excess RPP lump-sum payment transferred to the RRSP or RRIF.
The following is an overview of PAs under registered pension plans (RPPs) and deferred profit sharing plans (DPSPs). If you want to know how your PA is calculated or why you have a PA, contact your employer or plan administrator.
Your PA for a year is the total pension credits accrued for the year under RPP defined benefit or money purchase provisions and DPSPs your employer sponsors. A pension credit is a measure of the value of the benefit you earn for the year under a DPSP, or under a defined benefit or money purchase provision of an RPP.
If you participate in a government-sponsored retirement arrangement or a specified retirement arrangement, your pension credit amount may also measure the value of the benefit you earn for the year under these arrangements.
Your employer usually has to report a PA for you whether you get an immediate right to the benefit or pension you earn or your right arises only after you complete a further period of service or plan membership.
Where is your PA shown on your T4 or T4A slip? -
Your PA for 2006 appears in box 52 of your 2006 T4 slip, or in box 34 of your 2006 T4A slip. If you worked for more than one employer in 2006 and each employer sponsors their own RPP or DPSP, you may have more than one PA for 2006. Enter the total of your 2006 PAs from your 2006 T4 or T4A slips on line 206 of your 2006 return.
Your PA for a year will usually reduce your RRSP deduction limit for the following year. Your PA does not affect your income. If you contribute to an RRSP, your PA may indirectly affect the income taxes you pay or the refund you receive for the following year, because it reduces your RRSP deduction limit for the following year. For details on how to calculate your RRSP deduction limit, see "Calculating your 2006 RRSP deduction limit."
If you participate in a foreign plan, you may have to report an amount similar to a PA that will reduce your RRSP deduction limit for the following year. To determine the amount you have to report, contact us at 1-800-267-5177.
A PAR restores the reduction of your RRSP deduction limit if you earn benefits under an RPP or a DPSP and then lose your entitlement to the benefits, usually because you leave your plan before retirement. Your plan administrator or trustee will report a PAR for you, if the amount you receive from the plan is less than the total PAs and PSPAs that were previously reported for you.
Your plan administrator or trustee will send you a T10 slip that shows your PAR amount in box 2. Do not report this amount on your return. Your plan administrator or trustee will send us a copy of your T10 slip. We use that copy to increase your RRSP deduction limit for the year.
If you have a PAR for a termination in 2006, it increases your 2006 RRSP deduction limit. In such a case, we will usually send you Form T1028, RRSP Information for 2006, and give you your revised 2006 RRSP deduction limit when we have updated our records. If you do not receive Form T1028 and you want to confirm your 2006 RRSP deduction limit, visit our My Account Web site or call our Tax Information Phone Service (T.I.P.S.) at 1-800-267-6999. The T.I.P.S. RRSP service is available from mid-September to April 30. For RRSP information, you will be asked to provide your social insurance number, your month and year of birth, and the total income you reported on line 150 of your 2005 return.
The following is an overview of PSPAs. If you have questions about how your PSPA is calculated or why you have a PSPA, contact your employer or plan administrator.
A PSPA is an amount your RPP administrator calculates when benefits relating to a previous period of pensionable service are improved or when you are credited with a new period of pensionable past service. A PSPA only occurs if the improved benefits, or the new past service benefits relate to a period of service after 1989. A PSPA is the sum of the additional pension credits that would have been included in your PA if the upgraded benefits had actually been provided, or the additional service credited in those previous years.
The plan administrator calculates your PSPA and determines whether we have to certify the PSPA before the RPP can provide the past service benefits. There are two types of PSPAs: certifiable PSPAs, and PSPAs that are exempt from certification (exempt PSPAs). In most cases, the plan administrator has to report each PSPA to us, whether exempt or certifiable.
Exempt PSPAs - An exempt PSPA usually occurs when all or almost all plan members receive past service benefit upgrades. In most cases, when an employer provides past service benefits and there is an exempt PSPA that is more than zero, the plan administrator has to report the PSPA to us and to the plan member. For exempt PSPAs, the plan administrator has to complete a T215 slip, Past Service Pension Adjustment (PSPA) Exempt From Certification. Do not attach the T215 slip to your return.
An exempt PSPA will not reduce your RRSP deduction limit until the year following the year of the past service event. For details on how to calculate your RRSP deduction limit, see "Calculating your 2006 RRSP deduction limit."
Certifiable PSPAs - A certifiable PSPA usually occurs if you, as a plan member, decide to buy a period of past service that is pensionable service under your RPP.
We have to certify most PSPAs that are more than zero and do not meet the conditions for exemption outlined under "Exempt PSPAs" on the previous page. We have to certify the PSPA before you have the right to receive the benefits under the plan. A certified PSPA will reduce your RRSP deduction limit for the year in which it is certified.
Your plan administrator applies for PSPA certification by submitting a completed Form T1004, Applying for the Certification of a Provisional PSPA. Since the Income Tax Act has limits on the PSPA amount for past service benefits that we can certify, we will apply these limits to the information on Form T1004 and determine if we can certify the PSPA.
The amount it costs you to pay for past service benefits will likely not equal the PSPA associated with the benefits, since a PSPA measures the value of the past service benefits rather than how much it costs to fund the benefits. Usually, you can pay for the cost of past service benefits by:
Qualifying transfers - In general, a qualifying transfer is a direct transfer of a lump-sum amount from an unmatured RRSP, a money purchase provision of an RPP, or a DPSP. You can make a qualifying transfer to pay for all or part of the cost of the past service benefits related to the PSPA. If you make a qualifying transfer, the amount you transfer will reduce the PSPA amount the plan administrator has to report. Do not report your qualifying transfer amount as income, and do not deduct it.
If we cannot certify your PSPA because the PSPA amount is more than the allowable limit, you may still be able to obtain certification if you agree to make a qualifying RRSP withdrawal. We will send you Form T1006, Designating an RRSP Withdrawal as a Qualifying Withdrawal. Complete this form and return it to us within 30 days.
To speed up the certification process, your plan administrator can review the certification formula before sending Form T1004 to us. If your plan administrator knows that we will not certify the PSPA, the administrator may ask you in advance if you want to designate an RRSP qualifying withdrawal. If you choose to do so, the administrator may ask you to complete Form T1006, and will send it to us with the certification request. If you cannot or choose not to make an RRSP qualifying withdrawal, we will not certify the PSPA.
Qualifying withdrawal - In general, a qualifying withdrawal is an amount you withdraw from your RRSP and include in your income for the year you withdraw it. You have to meet a number of conditions before we will consider the amount to be a qualifying withdrawal. If you meet these conditions, you can designate the withdrawal and we can certify the PSPA. We outline these conditions in Part 3 of Form T1006, which you use to designate a qualifying withdrawal.
Your net PSPA for 2006 reduces the amount of RRSP contributions you can deduct for 2006. Your 2006 net PSPA is the total of:
Your RRSP deduction limit may be reduced by the net PSPA or similar amount for the year if you participated in a foreign plan or specified retirement arrangement and your past service benefits accruing under the plan were improved.
You can find your 2006 RRSP deduction limit on your latest Notice of Assessment or Notice of Reassessment. If you receive a certified Form T1004 after we send you your notice, we may reduce your 2006 RRSP deduction limit. In such a case, we will usually send you Form T1028, RRSP Information for 2006, and give you your revised 2006 RRSP deduction limit when we have updated our records. If you do not receive Form T1028 and you want to confirm your 2006 RRSP deduction limit, visit our My Account Web site or call our Tax Information Phone Service (T.I.P.S.) at 1-800-267-6999.
The T.I.P.S. RRSP service is available from mid-September to April 30. For RRSP information, you will be asked to provide your social insurance number, your month and year of birth, and the total income you reported on line 150 of your 2005 return.
You can download and print the following forms and publications by selecting their links below, or you can get printed copies by calling us at 1-800-959-2221.
NRTA1 Authorization for Non-Resident Tax Exemption
RC96 Lifelong Learning Plan (LLP) - Request to Withdraw Funds From an RRSP
T1-OVP 2006 Individual Tax Return for RRSP Excess Contributions
T1-OVPSCH Calculating the Amount of RRSP Excess
Contributions Made Before 1991 That Are Subject to Tax
T1-OVP-S 2006 Simplified Individual Tax Return for RRSP Excess Contributions
T1E-OVP Individual Tax Return for Registered Education Savings Plans Over-Payments
T746 Calculating Your Deduction for Refund of Unused RRSP Contributions
T1004 Applying for the Certification of a Provisional PSPA
T1006 Designating an RRSP Withdrawal as a Qualifying Withdrawal
T1007 Connected Person Information Return
T1036 Home Buyers' Plan (HBP) - Request to Withdraw Funds From an RRSP
T1043 Deduction for Excess Registered Pension Plan Transfers You Withdrew From an RRSP or RRIF
T1090 Death of a RRIF Annuitant - Designated Benefit
T1171 Tax Withholding Waiver on Accumulated Income Payments From RESPs
T1172 Additional Tax on Accumulated Income Payments From RESPs
T2019 Death of an RRSP Annuitant - Refund of Premiums
T2030 Direct Transfer Under Subparagraph 60(l)(v)
T2033 Direct Transfer Under Paragraph 146(16)(a) or 146.3(2)(e), or Subsection 146.3(14.1)(available on the Internet only)
T2078 Election Under Subsection 147(10.1) in Respect of a Single Payment Received From a Deferred Profit Sharing Plan
T2151 Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3
T2205 Amounts From a Spousal or Common-Law Partner RRSP or RRIF to Include in Income for ____
T2220 Transfer From an RRSP or a RRIF to Another RRSP or RRIF on Breakdown of Marriage or Common-law Partnership
T3012A Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in ____
RC4112 Lifelong Learning Plan (LLP)
RC4135 Home Buyers' Plan (HBP)
IC72-22 Registered Retirement Savings Plans
IC77-1 Deferred Profit Sharing Plans
IC78-18 Registered Retirement Income Funds
RC4092 Registered Education Savings Plans (RESPs)
RC4177 Death of an RRSP Annuitant
RC4178 Death of a RRIF Annuitant
IT-124 Contributions to Registered Retirement Savings Plans
IT-167 Registered Pension Plans - Employee's Contributions
IT-221 Determination of an Individual's Residence
IT-320 Qualified Investments - Trusts Governed by Registered Retirement Savings Plans, Registered Education Savings Plans and Registered Retirement Income Funds
IT-337 Retiring Allowances
IT-412 Foreign Property of Registered Plans
IT-499 Superannuation or Pension Benefits
IT-500 Registered Retirement Savings Plans - Death of an Annuitant
IT-528 Transfer of Funds Between Registered Plans
We review our publications every year. If you have any comments or suggestions that would help us improve them, we would like to hear from you.
Please send your comments to:
Taxpayer Services Directorate
Canada Revenue Agency
750 Heron Road
Ottawa Ontario K1A 0L5
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Date modified: 2006-11-14 |
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