You have excess RRSP contributions if the total of:
- Your unused contributions from prior years,
- Your current year contributions, and
- $2000 is more than your RRSP deduction limit shown on your latest Notice of Assessment.
You have to pay a tax of 1% per month on your excess contributions for every month that the contributions remain in an RRSP or until your excess amount is reduced by new RRSP deduction room. You may want to reduce continuing penalties by withdrawing the amount of the excess beyond the permitted $2,000. RRSP withdrawals must be reported in your personal tax return in the year of withdrawal.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.