I have a client whose husband passed away Oct.31, 2021. As she was named his beneficiary, his RRIF transferred directly to her. The wife is 79 years of age. The wife was issued a T4RIF with the transferred amount in Box 16 and Box 24, as it should be. But she was also issued an Official RRSP Tax Receipt for the transferred amount. When I enter the T4RIF in TaxCyle and choose ‘Recieved due to death of a Spouse/Partner (Box 16 or 22)’ it becomes non-taxable. All good. Why would there be a RRSP receipt issued? Should I just disregard this slip?
Mainly in case the CRA requests your client provide proof of the deduction that you should see on line 23200 of their T1 return. The financial institution shouldn’t really issue an RRSP receipt for a client over 71 years of age, but there really aren’t standardized RIF contribution receipts so some issuers will be lazy and simply issue a RRSP deduction receipt instead.
Thank you snoplowguy. I was aware a person over 71 was no longer permitted to contribute to an RRSP. I didn’t realize an institution would issue a slip even though there weren’t any contributions to the plan. I will keep it and send it in if there is any question of this transfer being non-taxable. Thanks again for taking the time to reply at this busy time of year!
I just saw a RRIF contribution slip for an amount rolled over from a deceased husband to his wife. The slip was made out to her in addition to the T4RIF for the same amount.
Ok. So my client should have received the RRIF contribution receipt as well then? When I input the T4RIF with the amounts in Box 16 and Box 24, and tick the box ‘Received due to death of Spouse/Partner…’ the amount becomes non-taxable. I don’t need any other slip. As I said before, I have an RRSP slip as well. But you are saying there is an actual RRIF contribution slip I should have? Did your client have the transferred amount in both Box 16 and 24? Where would you have entered the RRIF contribution slip, or did you? There are not any numbers that transfer to the T2205 from the T4RIF so I’m thinking it wouldn’t be entered there anyway.
The RRSP deduction receipt you have will likely be acceptable if the CRA requests proof of the line 23200 deduction. That is where the deduction gets automatically posted when you select “Amounts transferred to RRIF” as the choice for Box 24.
You do not enter the RRSP deduction receipt or a RRIF Contribution anywhere, it merely serves as evidence of the transfer from a tax sheltered plan to another tax sheltered plan.
As I said earlier, is there is no CRA Standardized RRIF Contribution receipt like there is with RRSP deduction receipts. Some institutions will have designed their own type of RRIF contribution receipts for this purpose (see @tsolowczuk’s reply) but many financial institutions have not. Instead, they may issue an official letter stating the amount was transferred to RRIF or an RRSP receipt like what your client was issued. The RRSP contribution receipt is technically not the correct document to issue, but I have never had any problems using that to support the line 23200 deduction.
I’m thinking that if you do a Google or web search on RRIF Contribution Receipt you won’t find too many hits because it’s not really a prescribed CRA document (like a T3, T4, T5, RRSP receipt etc).
I would love to see CRA just add a box to the T4RIF to indicate a tax free transfer
You would think that entering the amount in box 24 correctly would be enough and that the RRIF contribution slip would be redundant. Just realized that there may be a policy about a taxable income slip not being used to support a deduction.
I don’t do a lot of RRIF transfers, but have not seen the RRSP slip issued for those I have. I’ve not been asked for documentation either. Perhaps CRA has been asking for confirmation of transfers and financial institutions are now automatically sending proof with the T4RIF slips. Thank you to all for your input, I do appreciate it!
Great insight about not documenting the RRSP slip on the tax return but simply having it on hand in case CRA asks to see it.
Back in 2018, I learned this lesson the hard way as I had never encountered this scenario in the 18 years prior processing taxes and couldn’t find proper documentation for direction.
My 78 year old client’s husband died resulting in the transfer of his RIF’s to her account. In this tax season, she received three T4RIF statements: one was her own, and two were transfers from her husband’s RIF account which totaled $124,471.05. All three T4RIF slips showed Box 26 = NO for spousal RRIF and there were no indications on any of the slips that they were transfers from the estate. The bank included an RRSP slip for $124,471.05 Pursuant to Subsection 60(L) in order to claim the offset.
In filing her tax return, I designated the two T4RIF’s as transfers, recording the offset on Line 23200.
I had found instruction somewhere that I also needed to document the RRSP slip to fully claim the transfer. This made sense to me at the time, however, because of her age, Schedule 7 would not show the transfer without an override, so I filed the return with no override on schedule 7. The end result was that my client now had an RRSP carryforward of an unclaimed contribution totaling that same amount. YIKES!!!
As expected, seeing the huge sum on Line 23200, CRA requested documentation to support the deduction. They approved the transfer based on the RRSP contribution slip, however did not remove the unclaimed RRSP carryforward for this unclaimed contribution! Talking about an oversight by CRA. To get this carryforward removed, we had to request that the bank CANCEL the RRSP slip. Once cancelled, CRA then reassessed the tax return to remove the unclaimed RRSP contribution because it no longer existed. CRA did not come back to us requesting any other documentation to support the T4RIF transfers.
Moral of the story: don’t record that RRSP slip for those senior clients. As @snoplowguy suggested, merely save it in case CRA asks to see it.
This situation is the same as the one mentioned by you. I am not entering it on the return but will definitely be keeping it. Thanks.