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RRSP Transfer 60L does not match box 66 T4

Hello Everyone,

In 2018 my client got a T4 slip with a Box 66 amount of $15,000 (due to employment severance). She contributed $30,000 to an RRSP and got 2 RRSP receipts, one for $15,000 (her max RRSP contribution room for 2018) and one for $15,000 as a 60L Transfer. Her RRSP room was reduced by $15,000. A couple weeks ago I got ammended RRSP receipts for 2018, with an RRSP contribution of $20,000 and $10,000 in RRSP 60L Transfer. This came with a letter from the investment co. that the instructions they received from my client’s employer only allowed $10,000 in an RRSP transfer and thus they are re-issuing the slips. Client called the employer who insist that their box 66 on her T4 is correct- allowing $15,000 in transfers. - Note this is a big corporation and the dept. issuing T4’s is not the same as those issuing instructions to investment firms re severance. Neither the employer or investment company want to budge and re-issue slips so I have something that matches on my end. The bigger problem is that the re-issued 2018 RRSP slips mean that my client overcontributed $5K in her RRSP in 2018, and has no room in 2019 to absorb that as 2019 RRSP’s were already maxed out in 2019 - no more employment income either in 2019 or expected in the future.- Penalties are accumulating. What should I do - which slips take precedence if no one is willing to budge? T4 or RRSP 60L slip? Can I override RRSP contributions designated for transfer amount on the RRSP worksheet (which essentially overrides the T4 box 66 amounts if needed? Any help would be appreciated.

Is the company amending the T4 slip?

If so, she has a problem.

If not, no problem.

No, the company is refusing to ammend the original T4 showing $15,000 transfer permitted.

The permission to deduct is derived from the Company’s T4 slip, not the RRSP Receipt.

The marking on the RRSP receipt showing the 60(L) Transfer is a memo line by the financial institution. Frankly, the financial institution is making work for itself unnecessarily.

Agree with Tim…the RRSP issuer has no idea what the source of funds were. Only the issuer of the T4 knows that, and presumably has calculated same appropriately.

If mis-assessed by CRA based on the incorrect RRSP slip, the only choice(s) are to request a fix, or file an Objection and wait.

Query: does the client or investment company have a copy of the letter that came from the issuer of the T4 saying “why” the amount should be changed? That might be of interest. (It is conceivable that they simply sent a letter and didn’t want to issue an amended T4, but I find that somewhat dubious.)

I agree with Tim and Don that the T4 slip trumps the RRSP slip.

I disagree that you would need to wait for a T1 matching problem to get the RRSP slip without doing anything further. Instead I would either get all my ducks in a row, or, I would put the matter to bed for good. Personally I prefer the later. I don’t like unhappy surprises. I don’t like to worry my clients with ticking time bombs. And, I don’t like ticking time bombs in my tax or accounting practice. I find that things go better for me and for my clients when I am clear, fully documented, and proactive.

Instead, I would send the RRSP issuer a registered letter requesting that RRSP slip be amended back to the original. CC the client. Stating that:

  1. State that they are in error. Reference the ITA section.
  2. Request that they provide an ITA reference to support their refusal.
  3. State that you are filing the client’s tax return to match the ITA and their erroneous RRSP amended slip.
  4. State that in the event that CRA T1 matching reassesses the return that you will send CRA T1 Matching and CRA RRSP slips processing unit a copy of their repeated refusal to do so. Note that this would likely trigger an RRSP slips audit for 2019.

This methodology protects your client and yourself and puts the Financial Institution on notice.

Maintain a copy of the correspondence log and letters. Copy the client. Wait six weeks for a cancellation of the amended slip.

Now you are at a decision point:

A) If the amended slip is not cancelled, then forward this bundle to CRA RRSP slips processing unit to request their assistance in obtaining a cancellation of the amended RRSP.

B) Wait for T1 Matching to request for information.

C) Wait for T1 Matching to automatically reassess the RRSP return.

Personally I allow three months for the amended slip to be cancelled. If the slip is not cancelled, then I forward the bundle to CRA RRSP processing unit, CC T1 Specialty Services, CC the client, and CC the RRSP issuer. Request CRA to notify both you and the client of the result of their enquiry into the cancellation of the amended RRSP slip. This usually prevents an automatic CRA reassessment disallowing the original efiling amounts. This process usually takes 6 to 14 months to run it’s course.

To speed this up you can also ask CRA to provide a ruling in this matter.

In the past, I have dealt with many erroneous RRSP slips based on the allowable retiring allowance. This is what I was taught to do by CRA. Whenever I followed the process above, neither the client or I had any unwanted reassessments to deal with.

Well, Dominique, I can’t argue with your process overall, but I do think that you’re taking on the work responsibility. Personally, I prefer to dump that on CRA and make them deal with it. Filing an Objection is pretty painless, and providing the original info from the T4 issuer is usually enough for CRA to move. Little cost to the client and less work for me LOL…

In either event, it does, indeed take forever to resolve.

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It seems everyone is forgetting that the RRSP slip was amended according to “instructions received from the employer”.

You need to get a copy of this letter and get it into the hands of the company department that issued the T4. THEY need to settle the dispute, NOT you. When sending it to them, inform them of the RRSP contribution room problem and the expense they are causing their retiree. Most companies will back down and do what’s best for their ex-employees.

I ended up being the negotiator for the last couple days, and after telling both sides I will get the CRA to settle their dispute if both parties don’t give me matching slips, both sides finally re-assessed their figures/instructions (the paperwork between the employer and investment firm contained a mess of crossed out numbers, different numbers scribbled in, initialled by unknown parties etc.) and both will be providing me with ammended slips (T4 and RRSP’s) that actually match. The client gets the short end of the stick in the end with an extra bill from me, extra employment income in 2018 with tax payable, and an RRSP overpayment penalty. I don’t feel very victorious coming out of that one but it had to be done.

I hope your client understands your dedication to correct filings. They have a gem in you.