# Ill ask here since CRA is useless



## emperor (Jul 24, 2011)

Well I made a slip of the finger a few times with my Tangerine account I accidentally moved money to my rrsp account instead of my savings account. I contributed 3000 overall but I only have 1300 RRSP room and I don't ever get more RRSP room because of my pension so I can 't wait for my contribution room to increase,

I called CRA and after being on hold and transferred over 6 times I got someone that I could barely understand. I think what he told me is I'm okay because because I'm not $2000.00 over contribution, but he said I can only claim the $1300. I asked him what about the other $1700? Could I just remove that from my account? He said if I did I would be taxed on that amount in 2017. We talked for a good 20 mins but I just don't understand how this works. I never got any cash back on that $1700 I accidentally put it in my account now if I take that out I'll be taxed on it again?

What if I accidentally clicked 100k? I need to claim it as income in 2018 and get taxed another 30% loosing 30K? That make no sense at all.


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## Spudd (Oct 11, 2011)

Well, on the bright side, at least you don't have to pay taxes on any gains on that money now. At least not until you withdraw it.


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## AltaRed (Jun 8, 2009)

The $3000 contribution is fine since there is provision for a lifetime overcontribution limit of $2000. But you will not be able to deduct the difference ($1700) from your $3000 contribution until you have contribution room. It may take years to do that but if all else fails you will be able to do it the year after you retire from being an employee (your last year of employment should give you pension room for the following year). Just remember to deduct it when you have the room.

Another option is that if you did that in 2017 for a 2017 RRSP contribution, it is quite possible Tangerine will reverse that out...because they don't report RRSP contributions for 2017 to the CRA until early 2018. OTOH, if ithe contribution was for the 2016 year, your only option is what I mentioned initially. Hold your breath for X years until you have the room.


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## OnlyMyOpinion (Sep 1, 2013)

They were referring to the fact that over the life of your RRSP you are allowed to overcontribute by $2000 without penalty. But after this amount you ave no 'buffer' and any excess contributions at that point would face a 1%/mo penalty for each month you are in excess. Sounds like you have a $300 buffer left.
If this happened recently, if you contact Tangerine, they may be able & willing to reverse you contribution (so it is not reflected as a withdrawl).
Oops, I see AR covered this already.


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## AltaRed (Jun 8, 2009)

The issue is if Tangerine documented it as a 2016 contribution....that can be done until COB yesterday. If they did that, they have likely reported it already to CRA. I'd suggest the OP get on the phone to Tangerine today.


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## emperor (Jul 24, 2011)

It was reported to cra that's how I noticed, I went to do taxes and it showed up. That's the only way I caught it. I called tangerine and said I don't want to be able to add more to rrsp they said they can't do that. Thankfully this was a small mistake, what if I would have move 20 or 30 K over? I would have got no cash back but had to pay 30% tax on that cash again? And I would have to remove it or get billed the 1% interest. That's brutal, it could be a huge cost to someone just by the slip of a mouse. Choosing the wrong account from a drop down menu. I'll be looking to put my rrsp some where else so there is no possibility of it happening again.


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## Numbersman61 (Jan 26, 2015)

emperor said:


> Well I made a slip of the finger a few times with my Tangerine account I accidentally moved money to my rrsp account instead of my savings account. I contributed 3000 overall but I only have 1300 RRSP room and I don't ever get more RRSP room because of my pension so I can 't wait for my contribution room to increase,
> 
> I called CRA and after being on hold and transferred over 6 times I got someone that I could barely understand. I think what he told me is I'm okay because because I'm not $2000.00 over contribution, but he said I can only claim the $1300. I asked him what about the other $1700? Could I just remove that from my account? He said if I did I would be taxed on that amount in 2017. We talked for a good 20 mins but I just don't understand how this works. I never got any cash back on that $1700 I accidentally put it in my account now if I take that out I'll be taxed on it again?
> 
> What if I accidentally clicked 100k? I need to claim it as income in 2018 and get taxed another 30% loosing 30K? That make no sense at all.


Scroll down to bottom of link re excess contributions
http://taxtips.ca/rrsp/rrspcontributionlimits.htm


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## emperor (Jul 24, 2011)

Thanks that makes sense. I knew I'd get a better answer here than the CRA.


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## Eclectic12 (Oct 20, 2010)

emperor said:


> Well I made a slip of the finger a few times with my Tangerine account I accidentally moved money to my rrsp account instead of my savings account. I contributed 3000 overall but I only have 1300 RRSP room and I don't ever get more RRSP room because of my pension so I can 't wait for my contribution room to increase,
> 
> I called CRA and after being on hold and transferred over 6 times I got someone that I could barely understand. I think what he told me is I'm okay because because I'm not $2000.00 over contribution, but he said I can only claim the $1300 ...


There used to be an over-contribution allowance of $8K but too many must have been abusing it as it was cut to $2K.

As long as you are correct that you had $1300 of RRSP contribution room available so that only $1700 is the over contribution amount (i.e. less than $2000), the 1% penalty won't be applied. You just can't claim a deduction against income for overage $1700.




emperor said:


> I asked him what about the other $1700? Could I just remove that from my account? He said if I did I would be taxed on that amount in 2017.


Not sure why he's say you'd be taxed.

If you don't file special paperwork to identify the $1700 as removing an over-contribution, the FI will withhold the regular RRSP withholding amounts. 

If you file a Form T3012A to get CRA to certify that it's an overage removal, then the FI can withdraw the funds without taking any tax.
http://business.financialpost.com/news/did-you-over-contribute
http://www.collinsbarrow.com/en/cbn/publications/rrsp-excess-contributions


Cheers


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> emperor said:
> 
> 
> > Well I made a slip of the finger a few times with my Tangerine account I accidentally moved money to my rrsp account instead of my savings account. I contributed 3000 overall but I only have 1300 RRSP room and *I don't ever get more RRSP room because of my pension so I can't wait for my contribution room to increase * ...
> ...


With more time to think about it, have a coffee :biggrin: and remember how the pension adjustment (PA) is calculated ... as long as the OP will be employed over the next three years or so, letting the RRSP contribution room granted fix the problem, IMO is the better way to go.

The OP noticing that the pension is reducing the RRSP contribution room suggests that the pension is a DB pension (a DC pension's PA is much smaller and usually not noticed).

The PA formula for a DB pension is PA = (9 x annual accrued benefit) * – 600 *, where the bold text is mine.
http://www.milliondollarjourney.com/what-is-the-pension-adjustment-pa.htm

The " - 600 " seems to be granting at least $600 of RRSP contribution room per year. So unless I am missing something, as long as no further RRSP contributions are made, the 2016 tax return should add at least $600 of RRSP contribution room that can be deducted on the 2017 tax return. 


With the overage amount being $1700, by the third year or less - the RRSP contribution room being added should have taken care of the overage so that the OP has available RRSP contribution room again.


It's up to the OP to decide if it is worth filing the T3012A for such a small amount.


Cheers


*PS*

I can see using the T3012A for the larger $20 to $100K over contribution amounts.


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## OptsyEagle (Nov 29, 2009)

Google T3012. That is the form to remove money from an RRSP without taxation. I believe their is a time limit to do this but if you made the contribution this year, I doubt you will have a problem removing it. Send it to CRA. They will send it back and then send it on to Tangerine. CRA is pretty quick with them. A few weeks at most.


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## AltaRed (Jun 8, 2009)

FWIW, I never had RRSP contribution/deduction room for the last many, many years of my career. But I did have RRSP deduction room the year after I retired.....the time to soak up the lifetime over-contribution.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> FWIW, I never had RRSP contribution/deduction room for the last many, many years of my career ...


Was there a time when the "- 600" factor was not in the PA calculation?

So far, for the scenarios in my spreadsheet - most calculations end up with $600. The way the $600 is wiped out is if the annual pension benefit earned that year is over 2%.


Cheers


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## AltaRed (Jun 8, 2009)

I really have no idea. All I know is my RRSP contribution room stopped circa 1991 (I think) when they equalized the rules for RPP and non-RPP participants. Until then, there was a certain amount of room even for RPP participants. Hence why I posted that the OP may have to wait until the year after retirement to use the $1700 over-contribution. I suspect it really depends on the specific RPP plan as to whether the PA calculation results in some RRSP room or not.


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## Eclectic12 (Oct 20, 2010)

^^^

Weird ... the reference I can find for a change to the DB pension version of the PA calculation is 1997. 
Prior to that, the minus factor was $1000 instead of today's $600.


Cheers


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## carverman (Nov 8, 2010)

OnlyMyOpinion said:


> They were referring to the fact that over the life of your RRSP you are allowed to overcontribute by $2000 without penalty. But after this amount you ave no 'buffer' and any excess contributions at that point would face a 1%/mo penalty for each month you are in excess. Sounds like you have a $300 buffer left.
> If this happened recently, if you contact Tangerine, they *may be able & willing to reverse you contribution (so it is not reflected as a withdrawl).*
> Oops, I see AR covered this already.


whoops..thought it was a TFSA and not RRSP.


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