I have a client that received T4RIF income from her deceased spouse’s RRIF for 2020.
Box 16 - Total withdrawal - $29,673.72
Box 24 - Excess - $27,349.57
RRSP Contribution slip of $27,349.57
RRSP limit for 2020 is only $25,254 however and the surviving spouse is over 71 so doesn’t acrue more RRSP room even though she had T4’s in 2020.
I think from reading the RRIF guide that I am supposed to put the entire amount of the excess contributions on line 23200 under RRIF box 24: Excess amounts transferred to RRIF.
If I do that however then then I get a deduction on line 232000 for $27,349.57 and on line 20800 for $25,254 and the surviving spouse is $2,095 over contributed to her RRSP for 2020. A double deduction doesn’t make sense. If I back the line 23200 deduction off to $4,419.72 and leave $22,929.85 as a withdrawal rather than a transfer then I don’t get a double deduction between lines 23200 and 20800 but am still $2,095 over contributed to her RRSP. I think there must be a way to increase the RRSP limit for the year by the amount of the transfer to the RRIF but I don’t see it in the tax program. I assume the difference between box 16 and 24 of $2,324.15 would be reported on line 23200? I would need to confirm with the client but I am fairly certain there was no cash withdrawal at the time of transfer so I am not sure why the withdrawal amount is different than the excess amount. He normally withdraws the minimum amount required from his RRIF in December each year - well after his date of death in 2020 so no withdrawals would have been made prior to his death either.
Is there a way to report this properly in the tax program with the slips that I have without the surviving spouse paying tax on the RRIF transfer from her husband’s RRIF to hers a few weeks after his death? How do I do this without ending up over contributed to her RRSP? Or has the brokerage account issued the slips incorrectly?
I have an RRSP contribution slip - it has to be entered or the brokerage house has to cancel it don’t they? Or do you mean enter the $27k as a withdrawal instead of designating some as a transfer to RRSP? That doesn’t solve the RRSP over contribution problem or cover the last $2,324.15 in income. Am I still missing something?
No money was contributed or transferred to the surviving spouse’s RRSP so the institution had no business issuing the surviving spouse an RRSP deduction receipt. She was too old to have an RRSP, so it must have been transferred into her RRIF.
Some of these places issue RRSP deduction receipts in place of issuing RRIF deduction receipts because an RRSP receipt is a standardized document, whereas a RRIF deduction doesn’t have any type of official slip. The deduction receipt is only used if the CRA requests proof the RRIF was transferred to the spouse’s plan. It should not be entered as an RRSP deduction.
The deduction for a transfer going from a decedent’s RRIF to a surviving spouse’s RRIF get entered on line 23200.
Getting closer then. So I need to get the brokerage house to cancel the RRSP contribution receipt and enter the $27k (excess contributions) or $29k (whole transfer) on line 23200 then? The whole $29k went into the RRIF.
Not sure how that minimum withdrawal gets split between the deceased spouse and the surviving spouse, but I don’t think the entire $29k could have been transferred. If it was, then I suspect the minimum withdrawal was done after the transfer, and that amount should be taxable to the surviving spouse.
So, bottom line, I think line 23200 should show the $27k