RRSP contribution in the first year of job in Canada

[rikaz224]

Hi All,

I started working in 2019 in Canada. I didn't know that RRSP contributions can not be made on the first year so when my company asked if I want to contribute I said yes. So in 2019 until December I contributed 1416 dollars. And in 2020 January and February I contributed 2000 dollars. 

I haven't claimed any deductions on these amounts for 2019 tax year. Now I want to know what I should do to correct this mistake.

 

Please help me. I'm really worried.

 

Thanks

 

 

 

 

 

 

 

[TheTaxSmith]

Hello Rikaz224,

The first thing to determine will be your RRSP eligibility for 2020. Look at your 2019 CRA Notice of Assessment (NOA) and you should see your 2020 eligibility. Based on that you will report the 2019 contributions made ($1,416) plus any contributions in the first 60 days of 2020 ($2,000) on your 2020 return.

If you had reported the amounts contributed for 2019 and the amounts for the first 60 days of 2020 on your 2019 tax return they will show up as unused RRSPs on the 2019 NOA. If that is the case then you will have a deduction of the least of $3,416 or the 2020 RRSP eligibility.

If you did not report the RRSP contributions on the 2019 return then you will not see an unused RRSP amount on the 2019 NOA. In that case you will need to add them to the 2020 return and claim the lower of the total contributions or your 2020 RRSP eligibility.