Matured RRSP including Commutation payments

Matured RRSP

Generally, an RRSP must mature by the last day of the year in which you turn 71. On maturity, the funds must be withdrawn, transferred to a RRIF, or used to purchase an annuity. No tax is withheld on amounts transferred to a RRIF or used to purchase an annuity. However, if funds are withdrawn from your RRSP, tax will be withheld and the amount withdrawn has to be included in your income for the year in which it is withdrawn.

Commutation payments

A commutation payment is a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan. A commutation payment from your RRSP may be transferred directly to a RRIF, or to buy yourself an eligible annuity. You can use Form T2030, Direct Transfer Under Subparagraph 60(l)(v), to make this request.

If the RRSP from which you receive the withdrawal or commutation payment in 2011 is a spousal or common-law partner RRSP, or the RRIF from which you receive excess amounts in 2011 is a spousal or common-law partner RRIF, and your spouse or common-law partner made contributions to any of your RRSPs in 2009, 2010, or 2011, your spouse or common-law partner may have to include in income all or part of the amount received. For more information, see Withdrawing from spousal or common-law partner RRSPs.

Note
Amounts must be transferred to a RRIF if you were over 71 years old at the end of the tax year.

Completing your tax return

The payment is shown in box 22 of your T4RSP slip. Report this amount on line 129 of your return.

If the payment is transferred directly to your RRIF or used to purchased an eligible annuity, claim the amount on line 232 of your return.

If you receive the commutation payment in cash or cheque, the payment is not a transfer and is not tax free.

Forms and publications

• Form T2030, Direct Transfer Under Subparagraph 60(l)(v)
• Guide T4040, RRSPs and Other Registered Plans for Retirement

Related Topics

• Withdrawing from spousal or common-law partner RRSPs