Unused RRSP Contributions
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Thread: Unused RRSP Contributions

  1. #1
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    Unused RRSP Contributions

    Am I understanding Unused RRSP Contributions properly?

    Say for example (rounded numbers to make this easier):
    In 2010, I contributed $10,000 to my RRSP. However, instead of claiming the entire amount and getting a tax refund, I only claimed a fraction of this, $5,000.

    A few weeks later, I received my Notice of Assessment, which shows my contribution limit of $10,000 for 2011 (net of pension adjustments).

    This year, my net income is higher, but I kept my RRSP contribution constant at $10,000. Am I still capped to claim only $10,000 for my RRSP contribution? Or can I claim $15,000 seeing as I didn't claim this portion in 2010?


    I'm not sure how the Unused RRSP contribution limit comes into play, but in my case, it is less than the maximum RRSP limit for 2011. Therefore, I'm assuming no penalties will be incurred here.

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  2. #2
    Senior Member MoneyGal's Avatar
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    Contributions to your RRSP are either claimed or not claimed.

    There's no "unused RRSP contribution limit" - there's just your contribution limit.

    It is one cumulative number and increases each year (or not) based on your earned income. The total amount you can contribute without penalty is always your (cumulative) contribution limit, plus any applicable overcontribution allowance. (There's no "contribution limit for 2011" - there's the NEW room that arises as a result of your earned income in 2011, but there's just one contribution limit for you. Your NOA will give your total available contribution room as of that date, and no new room will [technically] arise until the year has ended.)

    Claiming the contribution on your taxes is a separate calculation and is not affected by and does not affect your contribution limit.

    I hope that is helpful. I'm not totally sure I understand your post.

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    Even if you don't intend to use a RRSP contribution made during the tax year as a deduction in the tax year, you do still need to declare it on the tax return (not to be confused with deducting it!) and this is where it seems you went wrong. Your notice of assessment would then show that you have $X of unused RRSP contributions available to carryforward to a future tax year.

  4. #4
    Senior Member MoneyGal's Avatar
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    Oooh...good point. The OP can adjust his return from last year so that all his contributions are accounted for. It's an easy change.

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    Thanks for the responses guys.

    MoneyGal - so last year, I contributed $10,000 to my RRSP. However, of that I only claimed $5,000. So, what would I have to do - if I want to claim the remaining $5,000 this year to reduce my overall tax payment?
    I already contributed $10,000 this year and let's assume my last Notice of Assessments says my RRSP deduction limit for 2011 = $10,000 (A)

    Young & Ambitious - I did declare my $10,000 contribution last year. On my last notice of assessment it says I have $5,000 (B) of unused RRSP contributions available for 2011.

    Effectively what I'm trying to do is minimize owing tax balance, by using the unclaimed portion of my 2010 RRSP contribution. Can I?

    Hope that makes sense.

    Thanks again guys.
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  6. #6
    Senior Member MoneyGal's Avatar
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    I think there's still one piece missing - what is your total available contribution room? It isn't the same as your 2011 room or your 2010 room - it's your total cumulative unused room. Your NOA has this figure on it (somewhere) but you could also get it from CRA.

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    Quote Originally Posted by MoneyGal View Post
    I think there's still one piece missing - what is your total available contribution room? It isn't the same as your 2011 room or your 2010 room - it's your total cumulative unused room. Your NOA has this figure on it (somewhere) but you could also get it from CRA.
    For some reason the website isn't letting me login right now. The NOA only shows my 2011 deduction limit....it doesn't show a cumulative unused room.

    But I'm wondering, can I not refile my 2010 return and claim the entire RRSP contributions I made in 2010? This way I get a bigger refund for the 2010 year.
    Then, I leave my 2011 RRSP as is and use the prior year refund to pay for this year's owing balance?
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  8. #8
    Senior Member caricole's Avatar
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    1) You have to include all your receipts

    2) If you do not claim the full amount of receipts (to carry forward some contributions), you have to include schedule 7

    3) If you did not include schedule 7, then all contributed amounts will be included in the year of filing

    4) To me, it sounds as if you never filed schedule 7 ???????

    http://www.cra-arc.gc.ca/E/pbg/tf/50...000-s7-11e.pdf

  9. #9
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    Quote Originally Posted by caricole View Post

    [ ... ]

    4) To me, it sounds as if you never filed schedule 7 ???????

    [ ... ]
    There really isn't enough details to tell.

    Another possibility is that the $10K contributed is on two separate RRSP receipts. If only one receipt was included on schedule 7, it may take a while for the financial institution to report the other $5K.

    Then too - the 2011 NOA for the RRSP contribution limit is going to include any previous year RRSP contribution room earned. So there are lots of possibilities that would explain why the 2011 could be at $10K *and* the 2010 $10K is correctly recorded.


    Tip: Keep track of any unclaimed RRSP contributions that have not yet been claimed against income. There don't seem to be a lot of reminders that it can still be claimed.


    Cheers

  10. #10
    Senior Member caricole's Avatar
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    Eclectic12...Tip: Keep track of any unclaimed RRSP contributions that have not yet been claimed against income. There don't seem to be a lot of reminders that it can still be claimed
    There is, on form T 1028 that is mailed at the same time as the assessement

    It reads more or less as follows

    a) Maximum of RRSP contributions available for 2010

    b) Minus contributions used for 2010

    c) Plus contributions pertaining to 2010 income

    d) Available contributions for 2011

    e) You have no unused contributions

    Be careful....available contributions are contributions that have not been done

    Unused contributions are overcontributions from the past

    Very easy to track in your taxfiles

    Last edited by caricole; 2012-03-29 at 03:22 AM.

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