Exceeded rrsp contribution first 60 days

[Sarahlee]

 

Hello.

I contributed to RRSP in 2023 and I contributed to RRSP in January and February 2024.

Among them, the amount of contributions in January and February exceeded the RRSP limit. This amount is $5,000.

Is it okay to claim only the amount I contributed in 2023 and not claim for January and February RRSP?

How do I put it in the ufile if this is possible?

 

Thanks.

[clw]

You are allowed to over contribute up to 2000$; the excess is penalized at 1% per month. So if you are over by 5000$, you would pay the 1% penalty on 5000-2000=3000$. You need to figure out how many months before you can absorb the 3000$ contribution in a future taxation year. You can never deduct an overcontribution, until it becomes a contribution. You can ask for a waiver, and it may be granted; see link below:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/what-happens-you-over-your-rrsp-prpp-deduction-limit.html

 

[Sarahlee]

Thank you. After reading the document, I think I need to fill out the T1-OVP form and submit no later than 90 days after the end of the year. Is the end of the year 2023? So that means it should have been done by March 30, 2024 or 2025?

[Geo123]

Hello Sarahlee,

Your RRSP over-contribution was in 2023.

Late-filing penalties

The CRA will charge a late-filing penalty if you do not file your T1-OVP return on time. The due date for filing the T1-OVP is 90 days after the end of the calendar year.

The penalty is:

    5% of your balance owing
    plus

    1% of your balance owing for each month that your tax return is late, to a maximum of 12 months

Your late-filing penalty may be higher if CRA charged you a late-filing penalty on your T1 OVP return for any of the three previous years.