# RSP overcontribution



## dustmaker (Apr 3, 2009)

Hi,

Can somebody explain RSP overcontribution rules for me? I have RSP through work and they contributed 27th payment on Feb 29th. That puts me $500 over my contribution limit. I do not understand what "lifetime" means. So when I contribute $500 less next year do I still have $2000 overcontribution limit or i just lost $500 and I only have $1500 now. Since I am contributing every year topping it up, I am always $100-200 over the limit. How do I keep track of that? In their statement I get (A) and (B) numbers, how do I use them? Should I contribute (B) less in the following year?
Thanks
DM


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## OptsyEagle (Nov 29, 2009)

You get a lifetime over-contribution amount of $2,000. If your contributions for any given calender year, exceed $2,000, then you will be subjected to a penalty of 1% per month on the amount of the over-contribution.

One must remember that this is calender year. So if you contribute in February of 2012 you can allocate that amount to 2011 or 2012. So if it overcontributes your 2011 amount, then just allocate it to 2012. From what you tell me, I doubt you are over-contributed at all, right now, since on January 1, 2012 you would be allocated all the contribution room that you generated in 2011. You may not know how much that is yet, until you do your taxes (or a calcualtion), but it is allocated to you already.

Overcontributions can not be deducted until your RSP contribution room increases to allow for it.


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## CanadianCapitalist (Mar 31, 2009)

As OptsyEagle said, you likely don't have an overcontribution.

If you use tax software, it is quite simple. Just enter the RRSP contributions in the correct row (A or B). Excess contributions will be carried forward to 2012. You can find your excess contribution from your Notice of Assessment for 2011, so you don't have to keep track of it separately.


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## dustmaker (Apr 3, 2009)

Thanks guys.
I guess I am still confused by "lifetime over contribution". Can I keep keep $300 -$500 over contribution in my RSP year after year or will it add up?
So after 5 years while maintaining $400 over contribution will they start charging me interest (5x$400=$2000)?
Thanks
DM


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## OptsyEagle (Nov 29, 2009)

dustmaker said:


> Thanks guys.
> I guess I am still confused by "lifetime over contribution". Can I keep keep $300 -$500 over contribution in my RSP year after year or will it add up?
> So after 5 years while maintaining $400 over contribution will they start charging me interest (5x$400=$2000)?
> Thanks
> DM


No. CRA calculates "unused" RRSP contributions for you. As long as this number never exceeds $2,000 more then any given years RRSP maximum contribution allowance, you will be fine.


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