# RRSP Over Contribution



## gocanada (Jan 3, 2014)

Hi all, I just received my 2015 Notice of Assessment. The available contribution room for 2016 is lower than I had expected. Unfortunately, I had made a contribution on March 10 expecting a higher number, so I am now in a situation where I will be over for 2016. 

I've read that option include filling out a T3012A now and then making a withdrawal, or making the withdrawal first and then filing a T746.

Unfortunately, to make matters more complex (I think), the contribution was into a Spousal RRSP. I think this makes matters more complex.

Anyone able to provide any suggestions on this?

Many thanks!


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## Spudd (Oct 11, 2011)

Are you more than 2K over the limit? If not, you are still OK, as there's an exemption allowing you to go up to 2K over the limit without penalty. 

If you are, I'm not sure what your next steps would be - I am guessing you'll need to withdraw the overcontribution.


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## gocanada (Jan 3, 2014)

Thanks for that. Unfortunately it's over by about 7k.

Does the fact it was a contribution to a spousal RRSP make the withdrawal process (and associated forms with the CRA) more complicated?


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## twa2w (Mar 5, 2016)

The spousal factor does not make it more complicated other than maybe a signature or two from the spouse. You will have to fill out paperwork to pay the penalty. You can also try filling out rc4288 to have the penalty waived.
If your rsp is with either a bank or planner,they should help you complete the paper work. If you are self directed you are on your own, but it is really not that tough as long as you follow the proper procedure. Don't do the withdrawal first then fill out the paper work otherwise there will be witholding tax,
Make sure you allow for the 2000 over contribution allowance so you don't pay too much penalty.
Cheers


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## hystat (Jun 18, 2010)

I am in the same situation with a similar amount, and unfortunately the "professionals" at CIBC helped me fill out the paper work and screwed it all up. (It was like watching a trainwreck in slow motion- complete incompetence). 

I rec'd a letter from CRA saying it was done wrong and documentation was not included. We then researched and found out they had the info all wrong on the form anyways. 

So, I'm starting over. I was $8961 over. So we did a new T3012A asking CRA to ignore my botched CIBC assisted submission. We used $6961 as the amount, as we subtracted the $2K forgiveable or whatever the term is. 

A new T3012A was sent Fri trackable mail -once again I guess we wait 6 weeks to see if we get a letter tell us we did it wrong again or not. 

I'm looking at the RC4288 now which goes to a completely different CRA address as the 3012A. 
So, is this RC4288 a form to ask to leave the overcontribution in there? or just a request to waive the 1%/month after the funds are moved back out. 
And on a RC4288 does one request penalty relief, tax relief, or both?
I don't particularly care about a 1% or $7 month penalty- who would? - is there really a form for that?)

Another question: if we're to remove the $6961, when do we do that exactly?

Will CIBC then issue new contribution receipts for 2015 to use for tax returns? or do we just staple the approved T3012A to the front and staple that to the tax return and write the amounts on? (for records only unless audited I suppose)


Also, the funds are still in the RRSP as of today. I see articles like this:
http://business.financialpost.com/news/did-you-over-contribute
that say withdraw it immediately, 
but don't I need the approved T3012A first??

This is a huge pain for a clerical error. I wish I had a time machine. 
It's holding me up from doing my tax return too. When I do that, do I put the amount after I draw back the near 6961 or do I do a tax return showing the whole overcontributed amount?


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## twa2w (Mar 5, 2016)

hystat said:


> I'm looking at the RC4288 now which goes to a completely different CRA address as the 3012A.
> So, is this RC4288 a form to ask to leave the overcontribution in there? or just a request to waive the 1%/month after the funds are moved back out.
> And on a RC4288 does one request penalty relief, tax relief, or both?
> I don't particularly care about a 1% or $7 month penalty- who would? - is there really a form for that?)
> ...


Ok 
1st. 1% is 69.61 per month penalty. 

2nd rc4288 is a request to waive the penalty.

3rd when you get the approved T3012A you will take that to the bank and CIBC, I assume,, will process a withdrawal with no witholding tax and credit your account. This may take them a few days.

4th. You will not be issued a new tax receipt by CIBC. CRA will process your larger receipt. Show as over contribution and eventually reduce by your t3012.

5th. AFAIK you would complete your tax return now with the existing receipt. You would show the larger contribution but only claim only the allowable RSP deduction of course. This is how CRA finds out you have over contributed. Normally in due course you would.get a letter from them stating you had over contributed. In this case you are preempting them by filing the t3012a now. 
Now several ways this could play out- I am not sure how their internal processing takes place
A) They may not even be able to process the t3012a until they get your tax return to confirm the over contribution.
B)they could approve your t3012 when they get it. They may not have your tax return processed at that time. When they get your tax return it may not be cross referenced to the t3012 and you may get a letter about the over contribution and you of course would advise them you had already processed the t3012.
C) everything goes according to plan, things are cross referenced and they will adjust contribution as appropriate and you never hear from them other than to deal with penalty.
D) who the heck knows when it comes to CRA. 
Hope this helps

Cheers
J


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## hystat (Jun 18, 2010)

that does help - Thanks a bunch.


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