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    Default RRSP over max deduction limit

    Hi Jane,
    If one "hypothetically" goes over their RRSP deduction limit...what can be done?
    Can I claim up to my limit and leave the rest unclaimed for next year?? Is there some huge penalty that I am going to be kicking myself for??
    I totally did not think about my pension amount applied when I purchased my rrsp's this year! I am over the maximum by less than $1000- will have the room next year
    I am thinking this is so not a good thing!

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    Hi there,

    Technically it's a penalty of 1% per month of the over-contributed amount .... but it may not be an overcontribution if it's less than $2000. Everyone has 'wiggle room' of a $2000 over-contribution limit. It also may not be an over-contribution if you made the contribution in January or February because technically you can apply these amounts to the current year (so the 2011 limit amount).

    It sounds like 'hypothetically' a person with a less than a $2000 over contributed amount made in the first two months of the current year will be fine

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    Quote Originally Posted by happymommy View Post
    Hi there,

    Technically it's a penalty of 1% per month of the over-contributed amount .... but it may not be an overcontribution if it's less than $2000. Everyone has 'wiggle room' of a $2000 over-contribution limit. It also may not be an over-contribution if you made the contribution in January or February because technically you can apply these amounts to the current year (so the 2011 limit amount).

    It sounds like 'hypothetically' a person with a less than a $2000 over contributed amount made in the first two months of the current year will be fine
    awesome....It was made if February 2011!!! So I can apply up to my max for 2010, and leave the rest for 2011??? Only have 1 receipt- does it get tricky for paperwork?

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    Hello again

    You can record the entire contribution but only claim (actually deduct) the amount of room you have for 2010 - you'll then have an undeducted contribution for the difference which will show up on your Notice of Assessment for the year.

    Just make sure you don't go over in 2011 and you're good to save

    ETA: not sure if the program you're using indicates when the contribution was made but if it does then be sure to indicate the contribution was made in the first 60 days (the January / February period). That way it's clear you can allocate it to either of the years.
    Last edited by strongmommy; 04-19-2011 at 05:50 AM.

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