# RRSP Limits - Contributions in first 60 days



## CadMan (Apr 16, 2010)

Does anyone know if an RRSP contribution made in the first 60 days of the year automatically counts towards your limit of the prior year? For some reason I was thinking that I had the ability to elect if a contribution in January, 2021 would count as either a 2020 or 2021 contribution, but not so sure now and may have over-contributed for 2020.


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## Plugging Along (Jan 3, 2011)

You have a choice. You must put them on tax return, but not use them. The contribution will can count against 2020 or 2021. You can count them or 2021 if you think you overcontributed.


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## gardner (Feb 13, 2014)

The new contribution room for a given tax year comes into effect on January first. So if you have $5k of room in December and gained $10K of room through 18% of income, then on Jan 1 you have 15K of room.

The 60-day rule is only about when you can carry back deductions to the prior year. You can carry forward deductible contributions and contribution room to future years (until you turn 72). If you anticipate having higher income in the future -- or in a particular year in the future -- it can make sense to contribute to your RRSP now, but wait to future years to take the deduction.


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## Eclectic12 (Oct 20, 2010)

Plugging Along said:


> You have a choice. You must put them on tax return, but not use them. The *contribution will can count against 2020 or 2021* ...


I have never seen a choice for the RRSP contribution going against the contribution limit. The tax return says to report a Jan 2021 to March 2021 RRSP contribution separately from a March 2020 to Dec 2020 contribution so AFAICT, there is no choice. CRA uses whatever behind the scenes to figure out if it was an over-contribution.

The deduction against income OTOH, one has to choose to use none, some or all of it against 2020 income.


Like gardner, I believe the 2020 RRSP contribution room earned is available Jan 1st, 2021 ... but one won't know it for sure until filing one's 2020 tax return.
That would mean there's whatever was on the 2019 NOA for RRSP contribution room (equal to or less than the 2019 RRSP Deduction Limit) plus whatever RRSP contribution room filing the 2020 tax return grants plus the $2K RRSP over contribution allowance.


Most people I know stay under the previous year's RRSP contribution limit so it hasn't come up in conversation.


Cheers


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## nobleea (Oct 11, 2013)

Weird addition to this. Not sure if its CRAs decision or just a quirk in the tax software I'm using (ufile)

I was in an overcontribution situation in late 2020. Not much, maybe 4K, but more than the allowance. Filed the appropriate papers and withdrew the overcontribution as quick as I could, but didn't happen til 2021. My contribution room as of Jan 1 2021 should have been more than enough to deal with the overcontribution and allow up to 20K additional contribution in first 60 days of 2021. However, my tax software at least will not recognize any contributions made in first 60 days due to overcontribution, however minor, in late 2020.


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## Plugging Along (Jan 3, 2011)

Eclectic12 said:


> I have never seen a choice for the RRSP contribution going against the contribution limit. The tax return says to report a Jan 2021 to March 2021 RRSP contribution separately from a March 2020 to Dec 2020 contribution so AFAICT, there is no choice. CRA uses whatever behind the scenes to figure out if it was an over-contribution.
> 
> The deduction against income OTOH, one has to choose to use none, some or all of it against 2020 income.
> 
> ...


I am not sure if I am explaining correctly, as my accountant does my filing. It may not be a choice, but rather, contributions in the first 60 days of the year can be used for the previous tax year, or saved for the current year. 

Here's how my accountant explained it as an example (all numbers fake)
2020: 
RRSP Contribution limit - $10k
RRSP Contribution - $5k (after the first 60 days) 

2021:
RRSP Contribution Limit - $10k
RRSP Contribution (In first 60 days) - $15k

Here's how it would be treated by CRA . 
2020 $5k contribution : goes to into 2020 tax year
2021 (First 60 days) : $15K Contribution: $5k can go into 2020 tax year, the remaining $10K would go into 2021 tax year without being an overcontribution.

Hopefully, that makes sense. This would be different than if someone contributed to in 2020 $5k and then$15k later in the year. The first $10K would go against 2020, the next $10k would be considered an over contribution.


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## CadMan (Apr 16, 2010)

Thanks for the input everyone. To give a bit more context on how this came up. In my employment I was given a stock bonus of ~$50k in 2020. This amount is included in income for the 2020 year, but there were no withholdings made. In order to avoid a big tax bill on the amount (without cash as part of the bonus amount to pay the tax payable), most employees have the units deposited into an RRSP account. I only had about ~25k in room in my RRSP, so waited until January to deposit them, thinking that I would claim the amount I had available for 2020 and the balance I would claim against my 2021 income (I am expecting to have the full contribution room of $27k for 2021).

However, when I completed my taxes now, it showed that I had a contribution of ~$75k for 2020, unused RRSP contributions of ~$26k and 2021 contribution room of ~$27k. When I look at the RRSP schedule, it shows "Contributions made March to December, 2020" and "Contributions made January/February, 2021). This is why I wondered if there is no ability to claim part of the January, 2021 contribution as a contribution for the 2021 tax year (this is different from claiming against the 2020 year and carrying it forward as an unclaimed amount, which is how it appears in my return that was prepared by Ufile). As it shows in the return, it looks like a $26k over-contribution for 2020 and still having full contribution room for 2021.


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## twowheeled (Jan 15, 2011)

I'm going to piggyback on this thread as I'm also confused since mismatching my deduction and contribution. Am I understanding correctly any contributions made in 2020 are not counted towards deduction limit for 2020? I am looking at CRA calculation of 2020 deduction limit and they have not counted any contributions made in 2020. 

The logic escapes me because why would anyone rush to contribute Jan-Mar of 2021 when this wouldn't appear to be deductible until 2022 tax return?


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## Plugging Along (Jan 3, 2011)

@CadMan Could you please provide the following numbers? Sorry, I am little distracted and don't want to make any assumptions that are wrong. Sorry I am little confused with your numbers. 

2020 RRSP Contribution Limit (based on your NOA for the 2019 tax year)
RRSP Contributions - can you please break down when you contributed $75K by:
-first 60 days in 2020

Mar-Dec 2020
first 60 days 2021


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## CadMan (Apr 16, 2010)

Plugging Along said:


> @CadMan Could you please provide the following numbers? Sorry, I am little distracted and don't want to make any assumptions that are wrong. Sorry I am little confused with your numbers.
> 
> 2020 RRSP Contribution Limit (based on your NOA for the 2019 tax year)
> RRSP Contributions - can you please break down when you contributed $75K by:
> ...


Sure, here are the exact numbers:

2020 contribution room = $45,802
Contributions March-Dec, 2020 = $19,109
Contributions first 60 days of 2021 = $52,797

My Ufile tax return is showing:

Unused RRSP contributions of $26,104
2021 deduction limit of $27,830

I see that there is a question in the Ufile interview set up if I had unused contributions in the first 60 days of the prior year. Perhaps if I say yes to this question in next year's return, it will give me the option of deducting from my 2021 income and not treat it as an overcontribution from 2020.


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## Plugging Along (Jan 3, 2011)

twowheeled said:


> I'm going to piggyback on this thread as I'm also confused since mismatching my deduction and contribution. Am I understanding correctly any contributions made in 2020 are not counted towards deduction limit for 2020? I am looking at CRA calculation of 2020 deduction limit and they have not counted any contributions made in 2020.
> 
> The logic escapes me because why would anyone rush to contribute Jan-Mar of 2021 when this wouldn't appear to be deductible until 2022 tax return?


RRSP contribution amounts are calculated based on the previous tax year's employment income. Do you not get a deduction until you have earned that amount and reported it, so it is one year behind.

-Let's say in 2019 your employment income is $100k as of Dec 31, 2019. This is you FIRST year working or filing taxes.

In 2019, since it is your first, you have NO RRSP contribution room.
Dec 31, 2019 You will have earn $18k of RRSP contribution room based on 2019 income for 2020 taxes.
You can put in the $18k into your RRSP any times started Jan 1, 2020 and onwards even if you have not filed taxes yet. However, if you do put in your RRSP before you file your taxes for the 2019 year, and miscalculate, you can be in over contribution.
April 2020 - You file your first set of income taxes. If you put in your contribution earlier in the year, you CANNOT deduct it for the 2019 tax year. You must wait for when you file your taxes in 2021 for the 2020 tax year.
If you make earn more employment income in 2020, therefore earn more RRSP contribution room, you cannot contribute for this addition until 2021.

So, contribution room is earned based on the calendar year, but you can contribute until the following tax year. People do it, so they can get the gains a year earlier.


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## cardhu (May 26, 2009)

CadMan said:


> I was thinking that I had the ability to elect if a contribution in January, 2021 would count as either a 2020 or 2021 contribution, but not so sure now and may have over-contributed for 2020 ….
> As it shows in the return, it looks like a $26k over-contribution for 2020


It is not possible for a contribution in 2021 to cause an overcontribution for 2020 … it simply can’t happen. 

Don’t let tax prep software tell you what your contribution limits are … it can only act on data you input (or that it carries forward from data you might have input in prior years)

Dealing with RRSPs is a two-step process …
Step 1 … report your contributions … as you’ve noted these are divided into two categories … March through December 2020, and first 60 days of 2021.
Step 2 … decide how much of your contributions you wish to apply as a deduction against your 2020 income … this obviously cannot exceed your deduction limit for 2020 … you do this via Schedule 7 of your return … any amount that you do NOT choose to apply to 2020 will automatically carry forward to be used in subsequent years. 



CadMan said:


> when I completed my taxes now, it showed that I had a contribution of ~$75k for 2020


Maybe UFile has merged the two steps described above, into one ... BUT … if it is coming up with $75k, then it must think you already had a $25k contribution sitting on the books, undeducted, in addition to the $50k bonus … is that possible?


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## Plugging Along (Jan 3, 2011)

CadMan said:


> Sure, here are the exact numbers:
> 
> 2020 contribution room = $45,802
> Contributions March-Dec, 2020 = $19,109
> ...


You should be able to deduct $45802 for the 2020 tax year, but you still must enter that your 2021 contribution. The remaining $26014 would be for 2021 (so don't put more in). 

I don't know how you can enter this into Uflie. My accountant always does this for me.


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## CadMan (Apr 16, 2010)

Plugging Along said:


> I am not sure if I am explaining correctly, as my accountant does my filing. It may not be a choice, but rather, contributions in the first 60 days of the year can be used for the previous tax year, or saved for the current year.
> 
> Here's how my accountant explained it as an example (all numbers fake)
> 2020:
> ...


This makes sense and is what I would have expected. I think I was thrown off my the fact that Ufile showed full contribution room for 2021 and didn't have an obvious place to put any contributions from the first 60 days of the prior calendar year.


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## Plugging Along (Jan 3, 2011)

CadMan said:


> This makes sense and is what I would have expected. I think I was thrown off my the fact that Ufile showed full contribution room for 2021 and didn't have an obvious place to put any contributions from the first 60 days


Sorry, I think this is a case the your software calculates it differently. I can only tell you how CRA would treat it. I would follow Cardhu advice and see if you can enter the contributions differently.


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## gardner (Feb 13, 2014)

Eclectic12 said:


> Like gardner, I believe the 2020 RRSP contribution room earned is available Jan 1st, 2021 ... but one won't know it for sure until filing one's 2020 tax return.


For folks with income high enough to max out the limit, the exact amount is known pretty well up front.








TaxTips.ca - RRSP Contribution Limits & Who Can Contribute


TaxTips.ca - RRSP, MPP and DPSP Contribution Limits - Who can contribute, and how much?; Earned income; Deduction limit; Contribution room; Excess contributions.




www.taxtips.ca





For example, if you earned over $152k of employment income last year, the RRSP room is going to be $27,230. No need to wait for CRA's opinion, you can just go ahead and load up the RRSP for the year. Also, once you have your T4 or even your December pay stub, you can do the 18% calculation and deposit 95% of that without risk. There is the permitted $2k overcontribution space to allow for miscalculations. Some folks perpetually keep THAT maxed, which is running things a bit more aggressive than I care for.


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## Eclectic12 (Oct 20, 2010)

Plugging Along said:


> I am not sure if I am explaining correctly, as my accountant does my filing. It may not be a choice, but rather, contributions in the first 60 days of the year can be used for the previous tax year, or saved for the current year.


RRSP contributions and whether one is over the limit are as of the day the contribution was made.

The deduction against income can all or partially be used against the previous calendar year's income with any remainder being carried forward. It is up the tax payer to flag in what tax year they want to take the carried forward deduction.




Plugging Along said:


> ... Here's how it would be treated by CRA .
> 2020 $5k contribution : goes to into 2020 tax year
> 2021 (First 60 days) : $15K Contribution: $5k can go into 2020 tax year, the remaining $10K would go into 2021 tax year without being an overcontribution.
> 
> Hopefully, that makes sense.


In terms of how the tax payer decides to apply the deduction ... sure. Or the tax payer could decide to carry forward the $5K and $15K to have a $20K deduction for tax year 2022 when they are selling a business for a large income.

In terms of the RRSP contribution limit to determine if one has made over contribution, my understanding is that what matters for each RRSP contribution is what is the available. It is made up of whatever has not yet been used and what earned income has added on Jan 1st.


For example, the $5K contribution is likely after after the 2019 tax return was filed to have the 2020 NOA show $10K of RRSP contribution room.
The $15K has whatever is left over from 2020 (i.e. $5K) plus whatever the 2020 tax return employment income granted plus the $2K over allowance.


Cheers


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## cardhu (May 26, 2009)

twowheeled said:


> Am I understanding correctly any contributions made in 2020 are not counted towards deduction limit for 2020? I am looking at CRA calculation of 2020 deduction limit and they have not counted any contributions made in 2020.


You’re mixing terminologies … deduction limit refers to _*deductions*_ … and contribution limit refers to _*contributions*_ … contributions don't change your deduction limit … only deductions do that, and you won’t claim any deductions until you submit your 2020 tax return, so your 2020 deduction limit will remain unchanged until then no matter how many contributions you make in the interim … it is up to you to remember how much you’ve contributed in the past few months but that ordinarily shouldn’t be that hard to do. . 



twowheeled said:


> The logic escapes me because why would anyone rush to contribute Jan-Mar of 2021 when this wouldn't appear to be deductible until 2022 tax return?


It is deductible on the 2020 tax return (provided it doesn’t exceed the deduction limit for that year). 



Eclectic said:


> I believe the 2020 RRSP contribution room earned is available Jan 1st, 2021 ... but one won't know it for sure until filing one's 2020 tax return. .


I know for sure, long before January 1st what my next year’s contribution room is going to be. T’ain’t that difficult. 



Eclectic said:


> Most people I know stay under the previous year's RRSP contribution limit so it hasn't come up in conversation. .


Many people contribute immediately, on January 2nd (financial institutions are closed on the 1st), based on what they know to be their current year’s contribution limits.



gardner said:


> You can carry forward deductible contributions and contribution room to future years (until you turn 72). If you anticipate having higher income in the future -- or in a particular year in the future -- it can make sense to contribute to your RRSP now, but wait to future years to take the deduction.


While it is factually true that you are allowed to do this, the suggestion that it can make sense is FAR more common than math and logic would dictate … judging by remarks in online forums, deferral of deduction is more often founded on wishful thinking than on rational analysis. 



gardner said:


> There is the permitted $2k overcontribution space to allow for miscalculations. Some folks perpetually keep THAT maxed, .


Yeah, I know people who do that, too ... but running a perpetual overcontribution is akin to deferring the deduction for decades … it rarely works out beneficially.


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## Eclectic12 (Oct 20, 2010)

gardner said:


> For folks with income high enough to max out the limit, the exact amount is known pretty well up front ...
> For example, if you earned over $152k of employment income last year, the RRSP room is going to be $27,230. No need to wait for CRA's opinion, you can just go ahead and load up the RRSP for the year. Also, once you have your T4 or even your December pay stub, you can do the 18% calculation and *deposit 95% of that without risk*.


We seem to be building in assumptions without outlining them.

My co-worker will be ecstatic that Dec pay stub x 18% x 95% is safe. Usually the pension adjustment (PA) varies year to year where it cuts what would have been something over $20K of RRSP contribution room back to something under $5K. 


But you are right ... for someone without a PA or one that is more predictable can be more make estimates.


Cheers


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## Eclectic12 (Oct 20, 2010)

CadMan said:


> ... I think I was thrown off my the fact that Ufile showed full contribution room for 2021 and didn't have an obvious place to put any contributions from the first 60 days of the prior calendar year.


Huh?

First sixty days of 2020 RRSP contributions were to be reported on your 2019 tax return.
The two categories for the 2020 tax return are 2020 March to Dec and 2021 Jan to March.


If you haven't been loading up the previous tax return to get the Name/Address and carry forward amounts then there is also a spot to plug in what was on your 2019 NOA.




Plugging Along said:


> Sorry, I think this is a case the your software calculates it differently. I can only tell you how CRA would treat it. I would follow Cardhu advice and see if you can enter the contributions differently.


UFile provides what Cardu describes.

*Edit:* Where one wants all RRSP contributions deducted against 2020 income (whether they are March - Dec 2020 and/or Jan - Mar 2021), there is a line in the RRSP section one leaves blank. If one has say $25K available to deduct but one wants to only deduct $15K then one populates this line with "$15K".


Cheers


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## twowheeled (Jan 15, 2011)

Plugging Along said:


> RRSP contribution amounts are calculated based on the previous tax year's employment income. Do you not get a deduction until you have earned that amount and reported it, so it is one year behind.
> 
> -Let's say in 2019 your employment income is $100k as of Dec 31, 2019. This is you FIRST year working or filing taxes.
> 
> ...


ok, I think I get it. So the NOA listed contribution room I received after filing taxes in 2019 is available to be contributed in 2020 but not deductible until 2021 filing?


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## Eclectic12 (Oct 20, 2010)

cardhu said:


> You’re mixing terminologies … deduction limit refers to _*deductions*_ … and contribution limit refers to _*contributions*_ … contributions don't change your deduction limit … only deductions do that ...


IMO CRA causes this confusion.

If one looks at the "Image of an RRSP Deduction Limit" - the 2019 Deduction Limit shows up, the 2020 earned income (including a PA that reduces the total) is added and a zero "Unused previous reported RRSP contributions available to deduct" is subtracted.

This ends up with the 2020 Deduction Limit = 2020 RRSP Contribution Room.

If like some, this tax payer had carried forward from a previous tax year, say $20K of "Unused previous reported RRSP contributions available to deduct" then the 2020 Deduction Limit would still be $170,059 but the RRSP contribution limit would be $150,079.





__





Where can you find your RRSP deduction limit? - Canada.ca


The maximum amount that an individual can contribute to registered retirement savings plans (RRSP) without tax implications and how much can be deducted.




www.canada.ca





*Edit:*
Or maybe a simpler way to say it is having "carried forward RRSP contributions" increases what CRA calls the "Deduction Limit".




Eclectic12 said:


> ... I believe the 2020 RRSP contribution room earned is available Jan 1st, 2021 ... but one won't know it for sure until filing one's 2020 tax return.





cardhu said:


> ... I know for sure, long before January 1st what my next year’s contribution room is going to be. T’ain’t that difficult.


Then I'd venture to guess you either don't have a PA or it's stable instead of varying year to year (like the contributions are varying lately).


Cheers


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## Plugging Along (Jan 3, 2011)

twowheeled said:


> thanks PA. this makes sense to me but seems contrary to how the CRA website reads.
> 
> *"March 1, 2021, is the deadline for contributing to your RRSP for amounts you want to deduct on your 2020 Income Tax and Benefit Return."*
> 
> ...


It's not contrary. If you doing the 2020 taxes, you can deduct whatever you contributed to your RRSP in 2020. The government is allowing people to also deduct any contributions you have have made the in the first 60 days of the new year AND you have the contribution room for 2020. In the case of the OP, he didn't have the full deduction room in Dec 31, 2020, he didn't have the contribution from from 2020. If you contribute in the first 60 days of 2021, and have already maxed out the previous year, then you are putting in the new contribution amount, and this cannot be deducted.


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## Eclectic12 (Oct 20, 2010)

twowheeled said:


> * ... "March 1, 2021, is the deadline for contributing to your RRSP for amounts you want to deduct on your 2020 Income Tax and Benefit Return."*
> 
> To me this states that if you make a contribution prior to March 1, 2021, you are in fact able to deduct it right away on your 2020 income tax return as RRSP deduction. Am I missing something?


Actually, with the FIs staying open late on March 1st, I'm confident that an RRSP contribution made on March 1st, 2021 can be deducted from the 2020 tax return.

Most years when I have contributed in say Feb of the following year, I have deducted the full amount against the previous tax year (ex. contribute in Feb 2019, deduct from 2018 income).


Cheers


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## Plugging Along (Jan 3, 2011)

Eclectic12 said:


> Actually, with the FIs staying open late on March 1st, I'm confident that an RRSP contribution made on March 1st, 2021 can be deducted from the 2020 tax return.
> 
> Most years when I have contributed in say Feb of the following year, I have deducted the full amount against the previous tax year (ex. contribute in Feb 2019, deduct from 2018 income).
> 
> ...


As long as they have the deduction room (based on om their previous year's NOA).


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## twowheeled (Jan 15, 2011)

Ok here is an example. In my 2019 NOA:

*RRSP Deduction limit for 2020 $50k
Available contribution room for 2020: $40k*

I contributed $40k in December of 2020.

Is my available deduction limit now $90k? Or is it 50k for 2020 and 40k for 2021?


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## Money172375 (Jun 29, 2018)

gardner said:


> For folks with income high enough to max out the limit, the exact amount is known pretty well up front.
> 
> 
> 
> ...


What if you participate in a pension?


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## Plugging Along (Jan 3, 2011)

twowheeled said:


> Ok here is an example. In my 2019 NOA:
> 
> *RRSP Deduction limit for 2020 $50k
> Available contribution room for 2020: $40k*
> ...


Were both numbers in your NOA for 2019? I haven't looked at mine very carefully.

You are allowed to contribute $40K for the 2020 tax year. You have until March 1, 2021 to make the contribution. If you already made it in Dec 2020, you can not contribute any more for the deduction from 2020 taxes.


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## Eclectic12 (Oct 20, 2010)

twowheeled said:


> Ok here is an example. In my 2019 NOA:
> 
> *RRSP Deduction limit for 2020 $50k
> Available contribution room for 2020: $40k *


The "Deduction Limit" is the sum of "previously reported RRSP contributions but not yet deducted" and "RRSP contribution room"
What the the deduction limit is saying is that if you want to max out everything you can deduct then there is $50K total available.

The Available Contribution Room being less than the Deduction Limit says there is $10K of "previously reported RRSP contributions but not yet deducted"

*Edit:*
To deduct against 2020 income the $10K that is on the books but not deducted, one simply fills out the 2020 tax return claiming the deduction.
Anything greater than the $10K requires the first step of an RRSP contribution by March 1st, 2021 is required to enable a deduction.




twowheeled said:


> I contributed $40k in December of 2020.
> Is my available deduction limit now $90k? Or is it 50k for 2020 and 40k for 2021?


Neither ... making the $40K DEc 2020 RRSP contribution means you've the available contribution room had gone to zero.

You can choose to deduct from 2020 income up to $50K (the $10K that was already available and the $40K Dec contribution).

If you choose to deduct say $20K from 2020 income, the 2021 Deduction limit will be the sum of "previously reported RRSP contributions but not yet deducted" (i.e. $30K) and whatever RRSP contribution room the 2020 earned income with all the relevant factors granted you.

If you choose to deduct the full $50K from 2020 income, the 2021 Deduction Limit will effectively be whatever RRSP contribution room the 2020 earned income with all the relevant factors granted you.


Cheers


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## gardner (Feb 13, 2014)

Money172375 said:


> What if you participate in a pension?


Yeah, sorry. If you're going to have a PA then I guess you have to wait and see what they calculate.


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## Eclectic12 (Oct 20, 2010)

Plugging Along said:


> .... Were both numbers in your NOA for 2019? I haven't looked at mine very carefully.


For those that deduct their RRSP contributions as they make them (i.e. no carry forward) then the "202x Deduction Limit" = "202x Contribution Room" because the "previously reported RRSP contributions not yet deducted" line is zero.

Anyone carrying forward RRSP contributions made but not yet deducted will have a higher "202x Deduction Limit" than the RRSP contribution room.




Plugging Along said:


> .... You are allowed to contribute $40K for the 2020 tax year. You have until March 1, 2021 to make the contribution. If you already made it in Dec 2020, you can not contribute any more for the deduction from 2020 taxes.


It is true that the contribution room is $40K and has been used up.

However, the 2020 income _can_ have $50K deducted as there is the $10K RRSP contribution made but not deducted yet plus the $40K RRSP contribution made in Dec (also not deducted yet).

Deducting the full $50K on the 2020 tax return will force the 2021 Deduction Limit back to being equal to the 2021 RRSP contribution room. Anything less than a $50K deduction is going to mean the 2021 Deduction Limit is larger than the 2021 RRSP contribution room.


Cheers


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## twowheeled (Jan 15, 2011)

Eclectic12 said:


> The "Deduction Limit" is the sum of "previously reported RRSP contributions but not yet deducted" and "RRSP contribution room"
> What the the deduction limit is saying is that if you want to max out everything you can deduct then there is $50K total available.
> 
> The Available Contribution Room being less than the Deduction Limit says there is $10K of "previously reported RRSP contributions but not yet deducted"
> ...


thank you, that makes sense. It is the wording that is confusing. Where the RRSP deduction limit should not calculated for you by the CRA since it depends on the variable of your contribution. Or, if it were to read deduction limit *if you contribute the maximum room of $xxx by date.

In other words, the max I can deduct with zero contributions is the unused rrsp contributions carried forward. And I can only deduct the 2020 deduction limit if I max out contribution room.


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## Eclectic12 (Oct 20, 2010)

gardner said:


> Yeah, sorry. If you're going to have a PA then I guess you have to wait and see what they calculate.


Depends ... if it is a DC pension where PA = employee + employer contributions - the Dec pay stub x 95% probably works reasonably well.

DB pensions, particularly ones changing contribution rates are IMO more difficult.

'Course there are the less frequent items like a pension adjustment reversal (PAR) adding more RRSP contribution room and Past Service Pension Adjustments (PSPA) that reduces RRSP contribution room.

Or you can be really unlucky like me. The CRA person used the PAR to blow away my existing RRSP contributions room. Instead of 5 + 1 becoming 6, 1 overwrote 5 to trigger multiple years of RRSP over contributions with years of penalties and interest. 


Cheers


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## Eclectic12 (Oct 20, 2010)

twowheeled said:


> thank you, that makes sense. It is the wording that is confusing ... Or, if it were to read deduction limit *if you contribute the maximum room of $xxx by date ...


I'd like a different heading or more description. 

At least the text and the line item are now the same size. I had to dig for quite a while the year I encountered it and the "RRSP contribution limit" was in smaller type.




twowheeled said:


> ... Where the RRSP deduction limit should not calculated for you by the CRA since it depends on the variable of your contribution.


Sure it should ... otherwise, it would be like capital losses where one has to remind oneself that one has them when one is reporting capital gains.

Reporting the Deduction Limit as one files the tax return is a good time as that's when the earned income to grant new RRSP contribution room is known.




twowheeled said:


> ... In other words, the max I can deduct with zero contributions is the unused rrsp contributions carried forward ...


If you don't make RRSP contributions after the NOA was produced and before Mar 2nd, 2021 ... then yes. 




twowheeled said:


> ... And I can only deduct the 2020 deduction limit if I max out contribution room.


Before March 2nd 2021, if you wanted to deduct the full $50K from 2020 income.

If you wanted to deduct say $30K from 2020 income then the $10K "in the bank" wouldn't be enough and you'd have had to make a $20K RRSP contribution before March 2nd 2021.


Cheers


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