# Unused RRSP Contributions



## Alaric (Dec 23, 2009)

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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## MoneyGal (Apr 24, 2009)

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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## Young&Ambitious (Aug 11, 2010)

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.


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## MoneyGal (Apr 24, 2009)

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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## Alaric (Dec 23, 2009)

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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## MoneyGal (Apr 24, 2009)

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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## Alaric (Dec 23, 2009)

MoneyGal said:


> 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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## caricole (Mar 12, 2012)

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/5000-s7/5000-s7-11e.pdf


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## Eclectic12 (Oct 20, 2010)

caricole said:


> [ ... ]
> 
> 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


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## caricole (Mar 12, 2012)

> 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


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## MoneyGal (Apr 24, 2009)

caricole said:


> Be careful....available contributions are contributions that have not been done
> 
> Unused contributions are *overcontributions* from the past


Man, these RRSP threads can get very confusing. "Overcontributions" has a very specific meaning w/r/t RRSPs. The OP is not talking about overcontributions - he is talking about contributions made, but not claimed as a deduction on the tax return. These are "unused contributions" in CRA language. 

Here's a link to the actual CRA page on unused RRSP contributions: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/nnsd-eng.html


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## Eclectic12 (Oct 20, 2010)

caricole said:


> There is, on form T 1028 that is mailed at the same time as the assessement
> 
> [ ... ]
> 
> ...


I'll have to go back and check my NOA plus related files. Schedule 7 says "NOA, NORA _or_ T1028" so I'm not sure what criteria results in getting a T1028.

Certainly in my case, the only item I can recall is the small box at the bottom of the page listing "For the current tax year, available RRSP contribution room = $###. The other related form that leaps to mind is schedule 7 which also has that amount of detail but is filed with the tax return for the year the RRSP contribution was made.


As for the "unused" comment, I agree with MoneyGal - an over-contribution has a specific use, which is different from unused RRSP contributions.


An example of unused RRSP contributions is if I have $10K of RRSP contribution room in 2012, I contribute $10K and claim $7K. I therefore have for 2012, $0 RRSP contribution room left, $7K claimed and $3K unused, with $0 over-contribution.

An example of over-contribution is if I have $10K of RRSP contribution room in 2012 and I contribute $15K to my RRSP, *then* I have an over-contribution. Planning to claim $7K and leaving the rest for future years is irrelevant to the over-contribution.


IMO, a better way of wording this is:


> Unused contributions are _contributions_ from the past



Cheers


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## cardhu (May 26, 2009)

Alaric, I don’t know why people are saying there are still pieces missing. You’ve provided more than enough info to answer your question. 


As you know, contributions and deductions are not the same thing. By extension, contribution limits and deduction limits are also not the same thing. 
Contribution limits will never appear on your NOA ... only deduction limits will ... the terminology often gets used interchangeably, but it really shouldn’t because they are never the same amount ... your contribution limit is always higher than your deduction limit, by the amount of the overcontribution allowance, which is currently $2k (it used to be higher) .
So, you say you *contributed* $10k for 2010, but only *deducted* $5k of that. That is where your _”$5,000 (B) of unused RRSP contributions”_ comes from. 
According to your NOA, your RRSP deduction limit for 2011 is $10,000. You can take that information quite literally ... it means that on your 2011 tax return your “RRSP deduction” may not exceed a “limit” of $10,000 ... pretty simple, it means exactly what it says ... and it includes all of your cumulative carried forward deduction limits from prior years ... so NO, you cannot claim $15,000 on your 2011 taxes. 
Note that depending on the timing of your 2011 contributions, you _*may*_ have exposed yourself to an overcontribution penalty for part of 2011. Since your deduction limit was $10,000, and you are allowed a $2000 overcontribution before penalties kick in, you can only safely contribute $12,000 before the end of 2011. You had already contributed $5k of that amount (undeducted RRSP contributions), so if you contributed an additional $10k before the end of 2011, you will likely be penalized. If some or all of those 2011 contributions were actually made during the first 60 days of 2012, then you’re fine for 2011, and you’ll have new deduction room generated based on your 2011 income that come into effect on January 1st, 2012, so you should still be fine right now, unless you have made some large contributions already for 2012. 
I suggest you suspend all further RRSP contributions, until you get this sorted out. 



caricole said:


> Unused contributions are overcontributions from the past


This is false ... unused contributions are contributions that have been reported, but not deducted ... they may or may not be _over_contributions


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## Alaric (Dec 23, 2009)

Much appreciated on all the responses.

Cardhu - I was speaking with the tax return department and they were saying that I could overcontributed by $2,000 without any penalties. As this is the overcontribution allowance (your second point). I guess what that means is I can claim up to $12,000 on my 2011 tax return without any penalties.

However, I asked her if I could simply modify my 2010 return and instead of claiming only $5k, I would claim my entire RRSP contribution for 2010 (which was $10K). Since this falls within my deduction limit, she is able to process this.

So in the end, I will get a refund for 2010 - while have my balance owing for 2011. The two will essentially offset one another.

What I learned from this is, your unclaimed contributions do not increase your deduction limit for following years. That's why I initially claimed only half of what I actually contributed. I expected my salary in 2011 to be higher and wanted to have a higher deduction limit for 2011. It didn't work out that way, as my deduction limit was capped at roughly the same (let's say 10K to make this easy).


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## cardhu (May 26, 2009)

Alaric said:


> I guess what that means is I can claim up to $12,000 on my 2011 tax return without any penalties.


If by “claim” you mean “deduct”, then NO, it doesn’t mean that … if your deduction limit is $10,000, then you can deduct up to $10,000 … again, the expression “deduction limit” means exactly what it says. 

Penalties are not based on how much you deduct, but on how much you contribute. You may have already (based on the dates of your contributions) exposed yourself to penalties. It makes no difference how much you deduct, nothing that you do on your 2011 tax return will change any of that. It is water under the bridge. 



Alaric said:


> I asked her if I could simply modify my 2010 return and instead of claiming only $5k, I would claim my entire RRSP contribution for 2010 (which was $10K). Since this falls within my deduction limit, she is able to process this.


Yes, but if you do that, then your deduction limit for 2011 falls to $5,000. You cannot deduct the same contribution twice. 

Note also that if you are already facing an overcontribution penalty for 2011, then doing this will NOT help. You cannot undo an overcontribution by moving the deduction from one tax year to another. The overcontribution would be the same, either way, and the penalty would be the same, either way. 



Alaric said:


> What I learned from this is, your unclaimed contributions do not increase your deduction limit for following years. That's why I initially claimed only half of what I actually contributed. I expected my salary in 2011 to be higher and wanted to have a higher deduction limit for 2011. It didn't work out that way, as my deduction limit was capped at roughly the same (let's say 10K to make this easy).


Yes, it did work out that way … by electing not to use the full deduction in 2010, you made a portion of it available for use in 2011 ... your 2011 deduction limit would have been $5k if you had maxed your deduction for 2010, but since you didn’t’, it ended up being $10k.

Again, I suggest that you terminate all future RRSP contributions, until you get this sorted out ... you may already be in overcontribution territory for 2012.


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## Eclectic12 (Oct 20, 2010)

cardu said:


> [ ... ]
> 
> your contribution limit is always higher than your deduction limit, by the amount of the overcontribution allowance, which is currently $2k (it used to be higher).
> 
> ...


I must be missing something for the contribution versus deduction limits. I can see this where the full contribution is always deducted and the over-contribution amount is not used.

However, say the 2011 NOA lists a $10K RRSP contribution limit where $10K was contributed but only $1K was deducted, at the end of 2011, the contribution limit will be the $2K over-contribution amount where the deduction limit is $9K.

Then as fresh contribution room is added in excess of $7K, the contribution limit will again be higher. Additional money contributed to the RRSP, particularly where the deduction is being saved for future years - can reverse the situation.



+1 on suspending any RRSP contributions until the potential over-contribution dealt with.
http://business.financialpost.com/2012/01/11/did-you-over-contribute/


Cheers


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## Alaric (Dec 23, 2009)

Cardhu thanks for taking the time to explain that. I see what you mean. So my gameplan now is to suspend any further contributions to my RRSP (this is taken out biweekly with every pay period), file my 2011 tax return, and wait for my 2011 notice of assessment. I'll be able to evaluate the impact of my 2010 and 2011 contributions/deductions then.

To confirm: so even if I deduct less than my actual RRSP contributions for 2011 - I may still face that penalty?


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