RRSP Contribution Limit is $27,830 but remember that RRSP contribution limit is individual because of the rollover of unused contribution room.
If you end up with an RRSP over contribution in excess of the $2,000 buffer, you may owe taxes. The CRA will charge you a 1 percent penalty, assessed monthly, for each month you’re over the limit. There are ways to minimize your penalty and avoid paying taxes on the extra amount.
How to find out your own contribution limit
After Canada Revenue Agency (CRA) processes your tax return, it sends a Notice of Assessment (NOA), which includes your next years’ contribution limit. This notice also shows your unused contribution room. You can also call your local Tax Information Phone Systems (TIPS) number, and be sure to have your SIN and previous tax return ready. Alternatively, you can register for My Account with CRA to view your RRSP limit as well as track your refund, make updates to your return and monitor payments.
Who can contribute to a RRSP, PRPP, or SPP?
Generally, you can contribute to your RRSP, PRPP, or SPP:
- until December 31st of the year you turn 71 years of age
- when you have available RRSP deduction limit room
You can contribute to your spouse’s or common-law partner’s RRSP or SPP until December 31st of the year that they turn 71 years of age.
What is the deadline to contribute to a RRSP, PRPP, or SPP for the purpose of claiming a deduction on your 2021 return?
Contributions made to your RRSP, PRPP or SPP or your spouse’s RRSP or SPP from March 3, 2021 to March 1, 2026 qualify.
What if you contribute more than your RRSP deduction limit?
Generally, you have to pay a tax of 1 percent per month on your contributions that exceed your RRSP deduction limit by more than $2,000.
What RRSP, PRPP, or SPP contributions can you deduct on your tax return?
You can claim a deduction for:
- contributions you made to your RRSP, PRPP or SPP
- contributions you made to your spouse’s or common-law partner’s RRSP or SPP
- your unused RRSP, PRPP or SPP contributions from a previous year
You cannot claim a deduction for:
- amounts you pay for administration services for an RRSP
- brokerage fees charged to buy and sell within a trusteed RRSP
- the interest you paid on money you borrowed to contribute to an RRSP, PRPP, or SPP
- any capital losses within your RRSP
- employer contributions to your PRPP