What happens if I exceed my RRSP contribution limit?

Asked 3 years ago

Do I have to pay a fee for going over my contribution limit, or will they start taxing my investment account?

Andia Rispah Igobwa

Thursday, October 07, 2021

Suppose you (or your employer) make excess contributions to an RRSP, PRPP, or SPP because you (or your employer) contribute more to your (or their spouse's or common-law partner's) RRSP or SPP than the maximum amount permitted under the law. In that case, you will have made an excess contribution.
Unless you: You must pay a 1% per month tax on overcontributions that exceed your RRSP/PRPP deduction limit by more than $2,000 unless you:
withdrew the excess amounts
To be eligible for the Individual Retirement Account, you must have contributed to a qualifying group retirement plan.
If you have to pay this 1% tax, fill out a T1-OVP, 2020 Individual Tax Return for RRSP, PRPP, and SPP Excess Contributions return and submit it to your tax center.
In less than 90 days of filing your income tax return, make a trust to avoid late-filing penalties or interest.