# RRSP excess contribution



## slacker (Mar 8, 2010)

Hi all,

Ok, looks like I made excess contributions in 2008 and 2009, and worse, I didn't report the contributions in my tax return. But luckily it looks like I didn't go over the $2000 limit, so probably no penalty.

For 2008, I over contributed about $1000. For 2009, I over contributed another $500. So a total running total of about $1500 over the limit as of end of 2009 tax year.

I am adjusting the 2008 tax return (line 245) on the CRA's website, and it says it's reassessing. I will adjust 2009, after they approve 2008 adjustments.

The question I have is, do I need to do anything to recover from going over the limit? or would my 2010 RRSP contribution room simply pull it back to under the limit?

Thanks,
Slacker


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## OhGreatGuru (May 24, 2009)

From the sound of things you will have an overcontribution from 2008 carried forward into 2009, which will increase your 2009 contributions claimed for 2009. This will result in an overcontribution for 2009, which will be carried forward to 2010. Since the amount of overcontribution did not exceed $2k there should be no penalty, but your contribution room for 2010. will be reduced. If you already used up that too, you may have another overcontribution to carry forward. Let CRA sort it out. I don't know if you should deal with it sequentially or ask CRA to deal with them all at once - call them for advice.


In the meantime stop guesstimating your contribution room and only contribute what CRA says you are allowed on your NOA. (I know, there are experts who say you should game the system by perpetually overcontributing $2k on purpose, but that's what leads people into trouble, especially people who "forget" to report contributions 2 years in a row.)


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## kcowan (Jul 1, 2010)

And since overcontributions are full-taxed when they are eventually withdrawn, this is a really bad strategy that should be stopped.


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## balexis (Apr 4, 2009)

kcowan: overcontributions are full-taxed when widthdrawn, like any other contribution, no? Why is overcontributing within the accepted limit a bad strategy?


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## slacker (Mar 8, 2010)

Just to clarify, (although I don't really need to convince anyone) this is just a result of my bone-headedness, and not an intentional "strategy" in any way. I do not endorse this "method", nor do I believe it will yield any meaningful benefit or advantage. Not to be boastful, but $2k is a drop in the bucket, and not really worth the effort involved. I'm a couch potato for a reason. I'm lazy and slackful.


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