# RRSP contributions in first 60 days



## atrp2biz (Sep 22, 2010)

I'm getting completely conflicting responses in my google search on this topic.

In 2010, I made contributions to my RRSP so that I would have under-contributed my limit by ~$200. Yesterday, I inadvertently contributed another $2500 (I meant to purchase RESPs). This was a TD e-series purchase and when I called TD, they said they couldn't see the transaction and couldn't do anything about it. 

Since the contribution was made in the first 60 days, would I have the ability to apply the contribution to 2011 (therefore have not over-contributed for 2010) or am I subject to the penalty? 

If I am subject to the penalty, is it for $2300 or $300 (the amount over and above the $2000 over-contribution allowance)?


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## windar2001 (Dec 21, 2010)

Since you made your contributions in the first 60 days, you have to declare them in 2010 and not 2011. However, you can split the deduction between 2010 and 2011. Which means you are fine unless your 2011 limit is really low.


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## the-royal-mail (Dec 11, 2009)

Dumb question on my part, but is there any chance you had unused contribution room left as indicated on your 2009 notice of assessement?

Most people have LOTS of room left, in which case it doesn't matter when you contribute.


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## Four Pillars (Apr 5, 2009)

atrp2biz said:


> I'm getting completely conflicting responses in my google search on this topic.
> 
> In 2010, I made contributions to my RRSP so that I would have under-contributed my limit by ~$200. Yesterday, I inadvertently contributed another $2500 (I meant to purchase RESPs). This was a TD e-series purchase and when I called TD, they said they couldn't see the transaction and couldn't see the transaction and couldn't do anything about it.
> 
> ...


Give it a couple more days and then contact TD again. They can and will cancel the purchases to the RRSP. Then it would be like it never happened. Once that occurs, just make the contribution to the RESP as you planned.


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## atrp2biz (Sep 22, 2010)

the-royal-mail said:


> Dumb question on my part, but is there any chance you had unused contribution room left as indicated on your 2009 notice of assessement?
> 
> Most people have LOTS of room left, in which case it doesn't matter when you contribute.


Nope. I'm maxed out (just checked on my CRA account online). This year I played catch-up and contributed $50k+...but ~$2500 too much.


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## atrp2biz (Sep 22, 2010)

Four Pillars said:


> Give it a couple more days and then contact TD again. They can and will cancel the purchases to the RRSP. Then it would be like it never happened. Once that occurs, just make the contribution to the RESP as you planned.


Really? Is there any risk to this being considered a withdrawal (that would result in me being double-screwed!)?


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## MoneyGal (Apr 24, 2009)

There's no risk that it will be considered a withdrawal IF it is processed correctly, and you will need to be sure that it is processed as a cancellation, not a withdrawal. 

However, if you were planning on making at least that amount of RRSP contribution for 2011, you could just leave it (if that works for you and your cash flow). 

Use Schedule 7 to report the contribution AND carry it forward to report on your 2011 return. 

Congratulations on not having any available contribution room!


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## the-royal-mail (Dec 11, 2009)

MoneyGal said:


> Congratulations on not having any available contribution room!


Yeah no kidding. What is he, like among the mere 5% (?) of citizens that fully use this amount?

In time, maybe the TFSA will render the RRSP redundant.


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## CanadianCapitalist (Mar 31, 2009)

MoneyGal said:


> There's no risk that it will be considered a withdrawal IF it is processed correctly, and you will need to be sure that it is processed as a cancellation, not a withdrawal.
> 
> However, if you were planning on making at least that amount of RRSP contribution for 2011, you could just leave it (if that works for you and your cash flow).
> 
> ...


+1

Any RRSP contribution made in the first 60 days can be applied to the previous year or the current year. Provided you have enough new contribution room for 2011, it won't be a problem.


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## Four Pillars (Apr 5, 2009)

the-royal-mail said:


> Yeah no kidding. What is he, like among the mere 5% (?) of citizens that fully use this amount?
> 
> *In time, maybe the TFSA will render the RRSP redundant*.


TFSA is to RRSP as apples are to oranges. The idea that one could make another redundant doesn't make a lot of sense. 

They are both good tools and you just have to learn how they should be used (as we all do).


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## atrp2biz (Sep 22, 2010)

MoneyGal said:


> Congratulations on not having any available contribution room!


Thanks. My wife and I make it a point to fully contribute to our RRSPs and TFSAs and $2500 per year into the RESP (to optimize the gov't grant). Investments outside of these shelters we anticipate holding for decades, thus deferring taxes on capital gains on those investments (banks, conglomerates, etc.). We're aiming for a BRK.A or two by year's end.  They fully retain their earnings and never pay a dividend.


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