RRSP Contribution Limits

The rrsp contribution limit for the 2018 income tax year is $26,230, or 18% of your 2017 "earned income", whichever is less.

The deadline for contributions is the first 60 days of the 2019. Contributions made within the first 60 days may be deducted in the prior year and/or carried forward to future tax years.

Future annual rrsp contribution limits are indexed to the consumer price index (CPI).

The overall amount you are able to contribute to rrsp will be reflected on your 2016 Notice of Assessment (NOA) from Canada Revenue Agency. It includes any amounts you have not contributed in prior years.

For RRSP purposes, “earned income” includes:

Net income from employment,
Net income from business, including from a partnership,
Net rental income
Canada Pension Plan or Quebec Pension Plan disability pensions
Spousal support payments included in your income;

Minus::

Losses from businesses and rental real estate
Deductible spousal support paid by you.

Canada Revenue Agency allows an individual to over contribute up to $2,000 to an rrsp. This amount cannot be deducted in the year of contribution, but is carried forward to a year in which you are eligible to claim the amount. It effectively acts as  a cushion in the event of an error in calculating your eligible contribution limit, although some taxpayers utilize the $2,000 as a form of  tax sheltering this additional amount.

There is a 1% per month interest penalty CRA will levy.on any amount in excess of the $2,000.. The excess amount must also be withdrawn from your rrsp. 

The opinions and comments expressed are those of R.W.(Bob) Davies, CFP and not those of Manulife Wealth Inc.. E & O E. For more information please contact  Bob at robert.davies@manulifewealth.ca