What is my RRSP deduction limit if I join an IPP in the current year?
If you are not a = 10% of any class of shares of the plan sponsor or, is not dealing at arm\’s length with the plan sponsor’)” onmouseout=”hideddrivetip()”>Connected Person, your RRSP deduction limit is not impacted for the year you join an IPP. If you are a = 10% of any class of shares of the plan sponsor or, is not dealing at arm\’s length with the plan sponsor’)” onmouseout=”hideddrivetip()”>Connected Person and your 1990 Pension Adjustment (PA) was $0, your RRSP deduction limit for the year you join an IPP is reduced by a special amount prescribed by ITR 8308(2). This reduction is 18% of your earned income for RRSP purposes for the year 1990, up to a maximum of $11,500. A T1007 Form (= 10% of any class of shares of the plan sponsor or, is not dealing at arm\’s length with the plan sponsor’)” onmouseout=”hideddrivetip()”>Connected Person Information Return) will be filed with CRA.
If you are not a Connected Person, your RRSP deduction limit is not impacted for the year you join an IPP. If you are a Connected Person and your 1990 Pension Adjustment (PA) was $0, your RRSP deduction limit for the year you join an IPP is reduced by a special amount prescribed by ITR 8308(2). This reduction is 18% of your earned income for RRSP purposes for the year 1990, up to a maximum of $11,500. A T1007 Form (Connected Person Information Return) will be filed with CRA. CRA reduces the RRSP deduction limit for the year the Connected Person joins a pension plan by the prescribed amount as calculated in the previous paragraph. IMPORTANT: If the member has already made full RRSP contributions for the year; the member should use a T3012 (Tax Deduction Waiver On The Refund Of Your Unused RRSP Contributions Made) Form to withdraw the excess on a tax-free basis and claim only the allowable RRSP deduction limit for the calendar year.
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