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How do RRSP deductions work


UFILER 47
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am getting a warning from Ufile that says "Your RRSP contribution exceeds your deduction limit".  When I reduce the contribution my tax refund also goes down.  So I am wondering what this warning means?  How can I calculate the correct contribution to maximize my return? this was from another chap with no answers,  can anyone explain the the topics are on that page dealing with RRSPs

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Hello UFILER 47

Warning - Over contributions to RRSP

The program generates a warning when your RRSP contribution exceeds your "RRSP/PRPP deduction limit for 2017 (per 2016 assessment, line A)", and also a second warning that the program will limit your contribution to the eligible amount.

The excess contribution will be transferred to Schedule 7, Part D entitled "RRSP/PRPP unused contributions available to carry forward".

To remove the second warning, go back to the "Interview" tab and in the "Left side menu on the Interview tab" and select "RRSP contributions, limits''.

On the page on your right, go to the line "RRSP or PRPP/VRSP deduction to use (leave blank to use all your contributions as a deduction)" and enter the maximum amount you can contribute.

Go back to the "Review" tab and a warning will be generated informing you that your RRSP contribution exceeds your deductible maximum and if it exceeds $ 2,000 you are subject to penalties.

However, the CRA will may assess monthly penalties of 1 % on your over contribution.

Certain rules apply on unused RRSP contributions, we recommend you visit the following link for more information:

http://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

In addition, we suggest that you contact the CRA to explain your situation and to obtain information to correct the situation, in order not to be penalized if possible.


 

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  • 1 year later...

Hi RRSP2018,

Warning - Over contributions to RRSP

The program generates a warning when your RRSP contribution exceeds your "RRSP/PRPP deduction limit for 2018 (per 2017 assessment)", and a second warning that the program will limit your contribution to the eligible amount.

The excess contribution will be transferred to Schedule 7, Part D entitled "RRSP/PRPP unused contributions available to carry forward".

To remove the second warning, go back to the "Interview" tab and in the "Left side menu on the Interview tab" and select "RRSP contributions, limits''.

On the page on your right, go to the line "RRSP or PRPP/VRSP deduction to use (leave blank to use all your contributions as a deduction)" and enter the maximum amount you can contribute.

Go back to the "Review" tab and a warning will be generated informing you that your RRSP contribution exceeds your deductible maximum and if it exceeds $ 2,000 you are subject to penalties.

However, the CRA will may assess monthly penalties of 1 % on your over contribution.

Certain rules apply on unused RRSP contributions, we recommend you visit the following link for more information:

http://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

In addition, we suggest that you contact the CRA to explain your situation and to obtain information to correct the situation, in order not to be penalized if possible.

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  • 10 months later...

I am getting the same warning, but my 2019 contributions do not exceed the amount I have available for prior years.  I entered the Available Contribution Room per the instructions to use the number on my 2018 Notice of Assessment. My 2019 contributions were about 2/3 of the amount allowed according to the 2018 Notice of Assessment. Why the warning?

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