Page 1 of 2 12 LastLast
Results 1 to 10 of 16

Thread: Notice of Assessment, unused RRSP contributions help

  1. #1
    Junior Member
    Join Date
    Apr 2012
    Posts
    10

    Notice of Assessment, unused RRSP contributions help

    I am currently doing my taxes and have come upon an error saying I have over contributed

    My RRSP deduction limit is $3708 (from A of my 2010 notice of assessment)

    I contributed a total of $3698 ($3102+$596)

    Undeducted contributions (per 2010 assessment, line B) = $734


    What I don't understand is the $734. I don't ever recall claiming an undeducted contribution.

    Is it this $734 that is putting me over my limit? Technically speaking couldn't I just not put down the $734 and carry it forward?

    Or could I put down just $10 for undeducted credits (which would put me at my limit of $3708) and then carry over the remaining $724?

    Will they know I am carrying over $724 if I do the above? How many years forward can I carry this undeducted amount?

    I looked back and this $734 started to appear as of my 2009 assessment (I suspect due to my company pension plan)

    Upon further investigation it appears I am allowed an over contribution of $2000 so maybe I should just claim it and be more careful in the future.

    Please advise

    Last edited by barry.choi; 2012-04-02 at 09:20 AM.

  2. #2
    Senior Member caricole's Avatar
    Join Date
    Mar 2012
    Location
    Province du Québec
    Posts
    141
    Or could I put down just $10 for undeducted credits (which would put me at my limit of $3708) and then carry over the remaining $724?
    By filing schedule 7, your undeducted contribution of 724$ will be automaticly carried forward indefinitly up and till you use it in the futur

    As long as you have no undeducted contribution exeeding 2.000$, because a that point, a penalty kicks in
    Last edited by caricole; 2012-04-03 at 12:08 PM.

  3. #3
    Senior Member
    Join Date
    Nov 2009
    Posts
    1,055
    You said you contributed $3,698 in 2010 but did you deduct $3,698 in 2010? If you didn't, it would get classified as "unused".

  4. #4
    Senior Member
    Join Date
    May 2009
    Location
    Ottawa
    Posts
    1,811
    You are the victim of one of the most misleading pieces of information CRA sends out every year to taxpayers. Many people read Line A of the NOA where it says "RRSP Deduction Limit" for the coming year, and interpret it to mean RRSP Contribution Limit for the coming year. But if you have undeducted contributions showing in Line B, these have been included in calculating the amount in Line A. You need to subtract Line B from A to find out what your available contribution room is.

    CRA's own web site is just as confused regarding the distinction between contribution limit and deduction limit, and the problem is reproduced in numerous articles on the web.

    If memory serves me correctly, if you have undeducted contributions, it may say somewhere else in the text of the NOA what your contribution limit is. But I can't find an example that had this in order to check.

    As for how this undeducted contribution came about, you would have to look back at past returns to see if you reported contributions to your pension fund or RRSP but made an error and did not deduct the full amount.
    (Or maybe CRA carried it forward for you because you did not need the full deduction to reduce your taxes to zero?)
    Last edited by OhGreatGuru; 2012-04-03 at 04:44 PM.

  5. #5
    Junior Member
    Join Date
    Apr 2012
    Posts
    10
    Quote Originally Posted by OhGreatGuru View Post
    You are the victim of one of the most misleading pieces of information CRA sends out every year to taxpayers. Many people read Line A of the NOA where it says "RRSP Deduction Limit" for the coming year, and interpret it to mean RRSP Contribution Limit for the coming year. But if you have undeducted contributions showing in Line B, these have been included in calculating the amount in Line A. You need to subtract Line B from A to find out what your available contribution room is.
    Yes this seems to be the case as I thought it meant I had an additional $734 to use ON TOP of my $3708. I'm fairly positive it started with my pension.

    What I'll do is not claim it this year then when I get my RRSP room for 2012 I'll do as you suggested and subtract Line B from A.

    Thanks for the info.

  6. #6
    Junior Member
    Join Date
    Apr 2012
    Posts
    10
    Now that 2012 tax year is over I just wanted to follow this up just to be certain I don't go over my "limit"

    So according to my CRA account I have $1246 of RRSP room for 2012. Since I still have an undeducted amount of $734 still that I did not claim the last few years does that mean I should only be contributing $512?

    How do I eliminate line B from my assessment? e.g. I want to claim that amount so I have $0 in Line B/

    To complicate things I actually already contributed $722 in 2012 forgetting that I need to subtract Line B so there is a difference of about $210

  7. #7
    Senior Member
    Join Date
    Nov 2009
    Posts
    1,055
    The best you can do is deduct $1246 this year. You will end up with $210 of undeducted contributions. Just make sure you subtract the $210 from the deduction limit for 2013 and contribute that exact amount and your issue will be over.

    The understanding of it is the main thing, so that you don't go over the $2,000 of allowed over-contributions, and experience penalties. Having an amount in the undeducted category is fine as long as you understand what it means and make it part of your tax plan.

  8. #8
    Junior Member
    Join Date
    Apr 2012
    Posts
    10
    Quote Originally Posted by OptsyEagle View Post
    The best you can do is deduct $1246 this year. You will end up with $210 of undeducted contributions. Just make sure you subtract the $210 from the deduction limit for 2013 and contribute that exact amount and your issue will be over.

    The understanding of it is the main thing, so that you don't go over the $2,000 of allowed over-contributions, and experience penalties. Having an amount in the undeducted category is fine as long as you understand what it means and make it part of your tax plan.
    I understand the amount, I guess the question is how do I eliminate the Line B?

    From what I recall when I file my taxes there is a section about line B undeducted RRSP. So In theory I should be putting say $722 (off new contributions) + $512 (from line B), Total = $1246?

    Then I carry over $210 of Line B for the next year?

    What's odd though is I thought I had already done the math properly when I got my letter of assessment last year and noticed the Line B for the first time but now I have an extra $210 that I didn't factor.

    Could have been a mistake on my end or I suppose it's possible the number on the CRA site right now is not correct.

    Of course I could look at my old tax return to figure it out but don't feel like digging around right now.

  9. #9
    Senior Member
    Join Date
    Nov 2009
    Posts
    1,055
    Well, I think you have figured out how it works and that is the main thing.

    Keep in mind, that because I almost always jump the gun and start contributing to my RRSP, for the current taxation year, in January, I almost always have some amounts of undeducted contributions, in Line B on my NOA.

    The receipts for the contributions I make in January and February come to me right away, since my broker doesn't know when I intend to deduct them. I simply declare them on my schedule 7 and deduct them next year. That's my strategy and I have no problem with it. I find it nice that CRA keeps track of them for me in this way, even though I doubt would have forgotten about them anyways.

    So I wouldn't get too pre-occupied with having a balance in that line B area.

  10. #10
    Junior Member
    Join Date
    Apr 2012
    Posts
    10
    Quote Originally Posted by OptsyEagle View Post
    Well, I think you have figured out how it works and that is the main thing.

    Keep in mind, that because I almost always jump the gun and start contributing to my RRSP, for the current taxation year, in January, I almost always have some amounts of undeducted contributions, in Line B on my NOA.

    The receipts for the contributions I make in January and February come to me right away, since my broker doesn't know when I intend to deduct them. I simply declare them on my schedule 7 and deduct them next year. That's my strategy and I have no problem with it. I find it nice that CRA keeps track of them for me in this way, even though I doubt would have forgotten about them anyways.

    So I wouldn't get too pre-occupied with having a balance in that line B area.
    True I'm probably over thinking this. I just like having everything nice and even. For me personally I have a pension and I try to keep my RRSP maxed out so when I have the undeducted amount "psychologically" I feel like I'm not saving to the best I can.

    Of course this is a good problem. I should probably just divert my attention to my TFSA and not worry as much about the minimal amount that's been undeducted


Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •