RRSP Contributions and HBP or LLP repayments

The RRSP contributions and HBP or LLP repayments (Schedule 7) page is used to report your contributions to a registered retirement savings plan (RRSP). Your RRSP contributions impact your taxes in two ways:

  • they reduce your tax payable (when you claim the RRSP deduction on your return)
  • the income you earn in the RRSP is tax-exempt as long as the money remains in the plan

Example, if your RRSP contribution limit for the year is $10,000 and you put the full amount in your RRSP, you can subtract the $10,000 from your income when you file your taxes. This means you don’t have to pay tax on your contribution amount. Additionally, unlike with regular investments, your RRSP contributions are tax sheltered, meaning it grows tax-free. However, you will have to pay tax on the money you withdraw from an RRSP (usually once you retire).

You’ll also need to complete this form if any of the following situations applied to you in 2018:

  • You withdrew money from your RRSP for the Home Buyer’s Plan (HBP) to pay for your new home or are repaying the RRSP funds you withdrew under the HBP
  • You withdrew money from your RRSP or the Lifelong Learning Plan (LLP) to pay for education or training for yourself or your spouse or are repaying RRSP funds you withdrew under the LLP
  • You aren’t deducting all your unused RRSP/PRPP contributions on your return (i.e. amount (B) on your latest notice of assessment or reassessment)
  • You aren’t deducting all the RRSP/PRPP contributions you made from March 2, 2018 to March 1, 2019 on your return
  • You’re applying your RRSP/PRPP contributions as a current year repayment under the HBP or LLP
  • You’ve transferred certain amounts you included in your income to your RRSP/PRPP or
  • You’ll be the beneficiary of income contributed to an amateur athlete trust in the year and you want that income to be used in calculating your RRSP/PRPP contribution limit

Notes:

Contributions made to an RRSP 

When completing your return, you’ll be asked to indicate when you made your contributions:

  • Between March 2 and December 31 of the current tax year or
  • Between January 1 and March 1 of the current calendar year

For example, let’s say you’re filing your 2018 tax return. You’ll need to specify how much you contributed to your (or your spouse’s or common-law partner’s) RRSP between March 2 and December 31, 2018 as well as the amount you contributed between January 1 and March 1, 2019. You can find this information on your RRSP contribution receipt (see section below).

If your contributions are more than your RRSP deduction limit, the Canada Revenue Agency (CRA) won’t allow the contributions you’ve made between January 1 and March 1, 2019.

Once you’ve reported your RRSP contributions on this page in H&R Block’s tax software, you’ll be able to choose how much you want to claim this year on the Your 2018 income page under the OPTIMIZATION icon on the WRAP-UP tab. Any RRSP contributions that you don’t claim a deduction for this year, will be carried forward for use in a future year. Refer to the What is the RRSP deduction limit and how much should I claim? section below for more information.

Your RRSP contribution receipt

You’ll need the information on your RRSP contribution receipt(s) to claim a deduction for the RRSP contributions you made during the year. The issuer of your RRSP (the financial institution such as your bank, credit union, trust, or insurance company with whom you set up your RRSP) will send you a receipt showing how much you or your spouse contributed to the RRSP from March 2, 2018 to December 31, 2018. If you also made RRSP contributions in the first 60 days of 2019, you’ll get a separate RRSP contribution receipt for that period.

If you haven't received a receipt for your RRSP contributions, contact the issuer of your RRSP to obtain a copy.

What is the RRSP deduction limit and how much should I claim?

Your RRSP deduction limit is the maximum amount you can deduct from your taxes in any given year. You can find your RRSP deduction limit for the year on:

  • Your notice of assessment (NOA) 
  • Your T1028: Your RRSP Information (in some cases, the CRA will send this to you once they’ve processed your previous year’s return)
  • My Account (registration required)
  • MyCRA (CRA’s mobile app) or
  • TIPS (Tax Information Phone Service) at 1-800-267-6999

It’s up to you to decide how much of your contributions you’d like to deduct on your return (up to the maximum of your deduction limit). You can claim all or a portion of your RRSP contributions, as long as it isn’t more than your RRSP deduction limit for the year. If your RRSP contributions for the year were more than your RRSP deduction limit, you’ll be able to carry forward the amount you couldn’t claim this year.

Tax Tip: It’s generally recommended that you deduct just enough of your RRSP contributions so that your tax owing is zero; this will maximize the amount that you can carry forward for use in a future year.

Once you’ve reported your RRSP contributions on this page in H&R Block’s tax software, you’ll be able to choose how much you want to claim on your 2018 return on the Your 2018 income page under the OPTIMIZATION icon on the WRAP-UP tab.

If you decide to:

  • Deduct the maximum allowable amount (RRSP deduction limit), then on the Your 2018 income page, select Yes in response to the following question: You entered {$} of RRSP contributions in your return. You can claim these contributions this year or carry forward some or all of them to use next year. Do you want to claim the maximum amount of contributions you can claim this year? 

  • Deduct only a portion of your contributions, you can carry forward the remaining amount for use in a future year. To do this, on the Your 2018 income page:

    • Select No in response to You entered {$} of RRSP contributions in your return. You can claim these contributions this year or carry forward some or all of them to use next year. Do you want to claim the maximum amount of contributions you can claim this year? 

    • Enter the amount of RRSP contributions you want to claim this year. Any remaining amount will automatically be carried forward.

What if I have an RRSP contribution from the first two months of 2018 or from a previous year, that I haven’t claimed yet?

If you have an RRSP contribution dated Jan or Feb 2018 that you didn’t report in your 2017 tax return (either as a contribution or as a carry-forward amount), you can’t apply it to your 2018 return UNTIL you have adjusted your 2017 tax return. You have two options:

  • You can use the amount as a deduction on your 2017 return, or
  • You can carry it forward to use it as deduction on your 2018 return

Either way, you have to adjust your 2017 tax return to indicate your choice and wait for the 2017 tax return adjustment to be processed by the CRA, before you can add the amount to your 2018 return.

If you made contributions in an earlier year and didn’t claim them on your previous year’s return, you can complete the RRSP contributions and HBP or LLP repayments page and request an adjustment to your return for that year with a T1 Adjustment form. By doing so, you’ll avoid having your deduction reduced or disallowed for contributions made.

Can I contribute to my spouse’s RRSP? 

Yes. However, you should be aware that when you contribute to your spouse’s RRSP, it will lower your RRSP deduction limit.

Example:

Karen has an RRSP deduction limit of $10,000 in 2018. She contributes $6,500 to her RRSP and $3,500 to her spouse’s. While Karen’s contribution to her spouse’s RRSP lowers her deduction limit by $3,500, Karen is entitled to claim a deduction for the contributions she’s made to both her and her spouse’s RRSP.

How do I know how much I contributed to my or my spouse's RRSP?

The issuer of your RRSP will send you a receipt showing how much you or your spouse contributed to the RRSP over the course of the year. If you’re expecting a receipt and didn’t get one, contact the company that issued you your RRSP.

Can I transfer other amounts (like a retiring allowance) to my RRSP?

As long as you’ve got contribution room, you can transfer certain amounts (like a retiring allowance, amounts paid from an RRSP or RRIF upon death of the annuitant, RPP lump sum, etc.) you received during the year either directly or indirectly into your RRSP.

A direct transfer means that the funds (which are considered taxable income) are contributed to your RRSP without being taxed. An indirect transfer means that the amounts that you’re transferring have been paid out to you and you need to make the RRSP contribution yourself.

For example, a direct transfer to an RRSP or RPP of an eligible retiring allowance (like severance pay) will not have income tax withheld at source. If, however, you receive the funds and then use them to make a contribution to your RRSP (an indirect transfer), they will be taxed. For more information, refer to the CRA guide, RRSPs and Other Registered Plans for Retirement.

Depending on your situation, the amount you’re allowed to transfer to your RRSP will vary. For example, you can only transfer the eligible part of your retiring allowance to your own RRSP (or SPP, RPP, or PRPP). As a rule, the eligible part you’re allowed to transfer is $2,000 for each year or part-year of service before 1996 in which you worked for the employer (or a person related to the employer) that paid you the retiring allowance.

For 2018, the eligible part of your retiring allowance can be found in box 66 of your T4 slip (an amount in box 67 represents the part that isn’t eligible for transfer). For more information on transferring this, or other types of property to your RRSP, refer to the CRA guide, RRSPs and Other Registered Plans for Retirement.

What if I withdrew an amount from my RRSP to certify a Past Service Pension Adjustment (PSPA)?

A PSPA represents the value of additional pension credits that an employee is entitled to receive due to:

  • An upgrade in their pension benefits* or
  • Pension buyback

*The upgrade in pension benefits must relate to a period of employment after 1989.

If the amount you withdrew from your RRSP was for a buyback of past service or an employment transfer, your RRSP contribution room will be reduced by the amount withdrawn in the year the pension buyback takes place. For more information on PSPA, refer to the Canada Revenue Agency (CRA) website.

Refer to your T4A and/or T4RSP slip for the amounts you’re designating as a qualified withdrawal.

I don’t have an RRSP, how do I set one up?

You can set up an RRSP through different types of financial institutions including your bank, credit union, trust, or insurance company. The issuer’s (the person or institution with whom you opened the RRSP) responsibilities include registering the plan, receiving the amounts that you contribute, and trading the securities that are held within the plan on your behalf.

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2018 taxes:

Note: If you’re a resident of Québec, H&R Block’s tax software will use the information you enter on your federal RRSP contributions and HBP or LLP repayments (Schedule 7) page, in your Revenu Québec return.

  1. On the QUICK ENTRY tab, click the QUICK SLIP icon. You will find yourself here:

    DIY18_QUICKSLIP_EN.png


  2. Type RRSP contribution receipt in the search field and either click the highlighted selection or press Enter to continue.

  3. When you arrive at the RRSP contributions and HBP or LLP repayments page, enter your information into the tax software.

Important: Once you’ve reported your RRSP contributions on this page, you’ll be able to choose the amount of contributions you want to claim on your return on the Your 2018 income page under the OPTIMIZATION icon on the WRAP-UP tab. If you don't claim all of your RRSP contributions for the year, the remaining amount will be carried forward for use in a future year.

DIY18_RRSPclaims_EN.png

Where do I report my HBP or LLP amounts?

Follow these steps in H&R Block’s 2018 tax software:

  1. Under the QUICK ENTRY tab, click the QUICK SLIP icon. You will find yourself here:

    DIY18_QUICKSLIP_EN.png


  2. Type Home Buyer’s Plan (HBP) repayment amount or Lifelong Learning Plan (LLP) repayment amount in the search field and either click the highlighted selection or press Enter to continue.

  3. When you arrive at the RRSP contributions and HBP or LLP repayments page, under the Your Home Buyer’s Plan or Lifelong Learning Plan heading, you’ll be able to indicate if you’ve taken money out under the HBP or the LLP and if you need to repay some of that amount this year.
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