What are the tax consequences of contributing to my wifes RRSP?
If you contribute to your wife’s RRSP, you get the same deduction as if you had contributed to your own. Likewise, the deduction is subject to your own RRSP limit, not your wife’s. On the other hand, the RRSP belongs to your wife, so when the money is removed, she will have to report it, not you. In short, you get the deduction; she reports the income. Therefore, it is an excellent way to split income between spouses. However, to prevent abuses, any withdrawals from a spousal RRSP will be attributed back to the contributor to the extent contributions were made to any spousal RRSP during that year or the immediately preceding two years.
If you contribute to your wifes RRSP, you get the same deduction as if you had contributed to your own. Likewise, the deduction is subject to your own RRSP limit, not your wifes. On the other hand, the RRSP belongs to your wife, so when the money is removed, she will have to report it, not you. In short, you get the deduction; she reports the income. Therefore, it is an excellent way to split income between spouses. However, to prevent abuses, any withdrawals from a spousal RRSP will be attributed back to the contributor to the extent contributions were made to any spousal RRSP during that year or the immediately preceding two years.
