# RSP over contribution - T1-OVP confusion



## 0xCC (Jan 5, 2012)

I'm trying to fill out the T1-OVP form because I made a mistake and over-contributed to my RSP in 2015 and also in 2016 because I forgot about the 2015 contribution I made.

I filled out the T1-OVP last year and paid the penalty. Now I have to fill out the form for this year and I am getting tripped up by the Note 5 in the 2017 form (it is Note 1 in the 2016 form).

The note states:


> Negative RRSP deduction room at the end of 2016
> (2)
> Fill out steps 2, 3, 4, and 5 of Chart 3 in the 2017 version of Guide T4040 and enter the amount from line 35.
> +
> ...


My question is, what exactly is "Negative RRSP deduction room at the end of 2016"? Is that the same as the 2017 *contribution* room?

The reason I have this question is it seems if the calculation in note 3 end up with a negative number that is greater than $2000 you end up losing the $2000 allowable excess contribution in the rest of the calculations in the form. You end up with a 0 on line 11 in the monthly chart which means you don't get credit for the $2000 allowable excess contribution (and the penalty is $240 more for a year than it would be if you could factor in that allowable excess contribution).

Does anyone have any tips on how to fill out the form so that $2000 excess contribution room gets factored in to the penalty calculation?


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## 0xCC (Jan 5, 2012)

I called the CRA to get clarification on this. I thought I would answer my own question here in case someone else runs into the same question and finds this post in a search for the answer.

It seems like Note 1 only applies if you have a Past Service Pension Adjustment (or that Note 1 is poorly worded). If you don't have a PSPA the wording for line 7 in the chart makes sense: "Enter, in each column, your 2017 RRSP deduction limit...". The 2017 RRSP *deduction* limit is on your Notice of Assessment and it is the above the "Unused RRSP contributions previously reported and available to deduct" line. It is *not* the final "Available contribution room" line, it is the line 3 lines above that one.

If Note 1 didn't say "Negative deduction room" and instead just said "deduction limit" then I don't think I would have been confused. In general the T1-OVP form makes good separation of the use of "deduction limit" and "contribution room" terms. When I filled the form out last year I got very confused because I was thinking of those two terms as being the same thing but they aren't. In this case in Note 1 however, they mix the terms and come up with "deduction room". Adding the negative in front of that made things even more confusing for me.

Anyway, hopefully this helps someone out in the future. The CRA agent I talked to was very helpful and was willing to go through the calculations to figure out how the form should be filled out. She didn't know the form off the top of her head so she actually had to go through the calculations and work through how things should work. The whole call took about 40 minutes, I was probably talking to the agent in less than 5 minutes on a Saturday afternoon. The only thing that made me slightly uncomfortable was at the end of the call she just said "put your deduction limit in row 7 in the table even though Note 1 doesn't seem to match up with that, they will figure it out when you submit the form". That wasn't very confidence inspiring but after reading the instructions for row 7 and sort of ignoring the wording for Note 1 that does make sense now.


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