Can you explain how I can withdraw the over-contributed RRSP amounts from the financial institution?
Allan Madan, CA
If you over contribute in your RRSP (even beyond the $2,000 allowed) you run the risk of being penalized 1% of the over contribution per month. So when you realize you do not want to leave it in the RRSP and be penalized, you try and withdraw it from the financial institution.
However, the institution will withhold 15% of the withdrawal as tax. Before withdrawing the amounts, you can file a form T3012A and get it approved by the CRA to show the financial institution to not withhold any taxes. Or after withdrawing the amounts, you can file a form T746.
The withdrawal will show up on the tax return as an income inclusion on line 129, and the same amount will be deducted online 232. And the tax withheld will be included on line 437.
Disclaimer
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.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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