I need some help as I can’t figure out where I’ve gone wrong & I’ve only completed this form a handful of times in TaxCycle. Tax payer had unused contributions at the end of 2019, made monthly contributions of $200 Jan-Dec 2020, withdrew excess in Sept 2020. I’m certain that he has to pay a penalty for the months Jan-Sept, but Taxcycle calculating zero, I must be missing something. Help? TIA
I think I may have got it. The RRSP contribution room should be the 2020 not the AFR amount. Would that be right?
Hey Nina,
If your client is over in their RRSP $2,000 or less, there’s no penalty by the CRA, though they might still want to draw out that money anyway.
I usually suggest to leave it since the following years income should wipe it if they are able to contribute their full allowable amounts. Only when over would I say pull it out.
If his unused contributions at the end of 2019 were more than $2000, he would have had to file a T1-OVP for 2019. If he had to file a 2019 T1-OVP, then your 2020 T1-OVP may generate some taxable amounts for Jan-Aug 2020 (depending whether additional RRSP room was generated during 2019). If he didn’t file a 2019 T1-OVP, and he pulled out all excess amounts in 2020, you shouldn’t have to file a 2020 T1-OVP.