# Bonus transferred RRSP



## mbmb (Oct 17, 2012)

My husband bonus was transferred by accident into the RRSP plan set up by employer with SunLife. 
Now that the money are already transferred, we would like to make an educated decision, tax wise.

The amount transferred into RRSP by employer is before federal/provincial tax, only CPP and EI was deducted from the gross bonus.
When we do our taxes, can we claim the RRSP amount and get the tax credit? It sound to me odd, as like we double dip: once we get bonus before tax, and once we tax credit


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## Spudd (Oct 11, 2011)

Yes you can. You're not double dipping. 

Normally, your employer deducts tax from your income so you won't get hit with a huge tax bill once a year. When you do your taxes, you just total up all your income, taxes paid, and tax credits, and then you either have a refund (because your employer deducted more tax than you actually owed) or you need to pay a bit more (in the opposite situation). 

In this case they didn't deduct tax from the bonus, but they put it into the RRSP so the tax credit from that will offset the tax that they didn't deduct. You should end up more or less even. 

But anyways, whether or not they deducted tax doesn't matter. When you do your taxes it will sort itself out.


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## OptsyEagle (Nov 29, 2009)

+1


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## mbmb (Oct 17, 2012)

thank you!
We are only thinking if we should reverse the bonus from RRSP into income since the Sun Life products are not that great as far as MER goes. 

If we elect reversal of bonus first 5000$ require 10% withholding tax and subsequent amount up to 10.000 requires 20% tax. 
We have to clarify what would be the fees involved, the exchange rate consequences, since the money have been already invested in a US stock as set up in the RRSP account.


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## MoneyGal (Apr 24, 2009)

It would be easier to transfer the funds to a *different* RSP.


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## OptsyEagle (Nov 29, 2009)

and withholding taxes are just a down payment on what you may owe at tax time. 20% tax is actually the lowest tax bracket in most provinces, so you may owe even more, depending on how high your total income is.

I would look at transferring it from RSP to RSP, but of course there are probably some fees involved.


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## rikk (May 28, 2012)

If the transfer was by accident, then why not have the accident corrected ... speaking from experience range:


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