What is the RRSP "deduction limit" on my Notice of Assessment?

Jamie Golombek, vice-president of taxation and estate planning at AIM Trimark Investments, has the answer.

Jamie Golombek 27 March, 2003 | 2:00PM

Dear Expert:

On my 2002 RRSP Deduction Limit Statement, the last line states that I have an unused RRSP contribution for the amount of $1,758 available for 2002. What exactly does that mean?

Expert Opinion:

There is a difference between the amount that you are allowed to contribute to an RRSP and the amount that you can deduct. The RRSP "contribution limit" is the amount that you are allowed to contribute to an RRSP without facing a penalty tax of 1% per month on the amount of any overcontribution (beyond a lifetime overcontribution limit of $2,000). The RRSP "deduction limit" is the amount that you can deduct in a particular year, which is based on your RRSP contribution limit as well as actual RRSP contributions made. The unused RRSP contribution amount of $1,758 that is reported on your 2001 Notice of Assessment means that you have contributions, which you have made but not yet claimed as a deduction on any tax return. This amount is available to be deducted on your 2002 tax return (or beyond).

Do you have a question?

All Ask the Expert questions are read and considered. Unfortunately we can't provide individual responses or respond to every question. Please note that questions about specific securities cannot be considered. Click here to Ask the Expert.

No statement in this article should be construed as a recommendation to buy or sell securities or to provide investment advice or individual financial planning. Morningstar Canada does not provide specific portfolio advice and recommends the use of a qualified financial planner when appropriate.

About Author

Jamie Golombek

Jamie Golombek