3

Assuming a clean slate (i.e. no carry-forward contribution room) I always thought the one could make their RRSP contribution any time within the calendar year + 60 days after the end of the year.

If one made a contribution in the 60 days after the end of year, you had the choice of which year to apply the deduction. Therefore, in essence, one had 14 months in which to make a contribution.

While not authoritative, I've also seen BMO state:

You can make your 2020 RRSP contribution as early as January 1, 2020.

However, looking at canada.ca it states:

Generally, the contribution year is the period that:

  • begins on the 61st day of a year...
  • ends on the 60th day of the following year

Thus being a 12-month span in-which to make a contribution.

So which is it? Am I (and BMO) mistaken? Has this changed? Is Canada.ca the authoritative source?

3
  • I am as surprised by this as you, but here is another link saying the same thing. canada.ca/en/revenue-agency/services/tax/individuals/topics/… Jan 8 at 21:34
  • So it's the 12-month period (March–March). Although, I'm still confused about PRPP (when employer matches contributions per paycheque that would obviously start in January. For PRPP, the following link seems to contradict the above one canada.ca/en/revenue-agency/services/tax/individuals/topics/…
    – skube
    Jan 9 at 11:18
  • 1
    Side note to your direct question - canada.ca tax guidance indicated as coming from the CRA is 'authoritative' in the sense that it gives you confirmation of how the CRA administratively views tax issues. For highly complex or divisive tax matters, the CRA's guidance may not be perfectly aligned with how the Income Tax Act is viewed legislatively or by the court system. However, generally speaking, for routine personal tax matters, you can take some comfort in acting according to the CRA's guidelines. You can't 'rely' on it in the sense that it is a bullet-proof defense against audit, however. Jan 10 at 13:58
1

The Canada link is how to fill out receipts. They will be broken down into 'first 60 days' and 'remainder of the year'. Your understanding of contributions available to deduct is correct. Basically all unused previous contributions up to the first 60 days of the year following the tax year. eg. You still have until March 1st 2022 to contribute for the 2021 tax year.

It's incorrect to say you have 14 months to contribute, you have from the year you turn 18 until 60 days after the tax year ends. I agree it seems like 14 months but that is an irrelevant observation and is just confusing you. On your taxes you fill out schedule 7 using the staggered 12 months for your contributions. If you don't end up using the contributions then you can use them later.

If you contributed to an RRSP in the first 60 days of 2021 then you should have already reported these on your taxes from 2020. You didn't have to use them for the 2020 tax year. If you try and report the first 60 days contribution of 2021 on your 2021 taxes you will confuse the CRA. This has happened in the past and people have been forced to explain.

3
  • For simplicity, let's assume no unused previous contributions. Are you confirming one has roughly 14 months (Jan - Mar of next year) to contribute?
    – skube
    Jan 8 at 20:06
  • I'm still confused about PRPP (employer matches contributions per paycheque) that would obviously start in January of each year. If I'm making a portion of my contributions each month of the year, then contribute the rest with a lump sum in the first 60 days of the following year, effectively I've been contributing for a span of 14 months.
    – skube
    Jan 10 at 11:46
  • 1
    @skube You don't deduct prpp on your taxes, the employer handles it. Your contributions are still deductible up to first 60 days of the following year. Just think of it as a tax year and a 60 day later rrsp/prpp contribution reporting year. They are staggered to allow people to contribute after the tax year ends. In your example the first 60 days of contributions in the first year were reported on the previous years taxes, whether or not you used them.
    – brian
    Jan 10 at 14:44

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.