Withdrawing unused RRSP contributions

If you did not deduct all the contributions you made to your RRSP or a spousal or common-law partner RRSP in 1991 and later years, you have two options:

• you can leave the unused contributions in the plan; or
  
• you can withdraw the unused contributions.

In either case, you may have to pay a 1% per-month tax on the part of your unused contributions that are excess contributions.

If you withdraw the unused contributions, you have to include them as income on your return. However, you may be able to deduct an amount equal to the withdrawn contributions that you include in your income, if you or your spouse or common-law partner received the unused RRSP contributions from an RRSP or RRIF:

• in the year you contributed them;
  
• in the following year; or
  
• in the year that you were sent a notice of assessment or notice of reassessment for the year you contributed them, or in the following year.

You can deduct the amount if you meet all of the following conditions:

• You have not deducted, for any year, the unused contributions that you made to your RRSP or to your spouse's RRSP or common-law partner's RRSP.
• You have not designated the withdrawal of the unused RRSP contributions as a qualifying withdrawal to have your PSPA certified.
• No part of the withdrawn contributions was a lump-sum payment from an RPP, or certain DPSP amounts that you transferred directly to an RRSP. For more information, see Registered pension plan (RPP) lump-sum payments.
• No part of the withdrawn contributions was a lump-sum payment from the Saskatchewan Pension Plan that you transferred directly to an RRSP.

In addition, it has to be reasonable for us to consider that at least one of the following applies:

• You reasonably expected to be able to fully deduct the RRSP contributions for the year you made the contributions or the immediately preceding year.
  
• You did not make the unused RRSP contributions intending to withdraw them and deduct an offsetting amount.

Note
If you or your spouse or common-law partner receives a payment for unused RRSP contributions you made and you deduct an amount under the above rules, we do not consider the unused RRSP contributions to be RRSP contributions after you or your spouse or common-law partner receives the payment. Accordingly, you cannot deduct the amount for any year.

If you meet all of the previous conditions and have not already withdrawn the unused contributions, you can withdraw them without having tax withheld. To do this, complete Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions made in ____.

If you made contributions to your RRSP or to your spouse's RRSP or common-law partner's RRSP that you did not deduct for any year and those funds are transferred from that RRSP to a RRIF, you may be allowed a deduction for amounts you or your spouse or common-law partner withdraws from that RRIF for those unused RRSP contributions. Claim this deduction on line 232 of your return.

Form T3012A cannot be used to withdraw unused RRSP contributions that were transferred to a RRIF. The financial institution must withhold tax for withdrawals made without Form T3012A.

Completing your tax return

Withdrawal made with Form T3012A that we approved

• Attach a copy of that form and the related T4RSP slip to your return.
  
• Report the amount shown in box 20 of your or your spouse's or common-law partner's T4RSP slip on line 129 of your return. For more information, see Calculating the income you and your spouse or common-law partner have to report.
  
• Deduct an amount on line 232 of your return equal to the unused contributions withdrawn.

Withdrawal made without Form T3012A

• Report the amount shown in box 22 of the T4RSP slip on line 129 of your tax return.
  
• If the amount appears in boxes 16 and 24 of the T4RIF slip and you were 65 years or older on December 31 of the tax year, report the amount shown in box 16 on line 115. Otherwise, report that amount on line 130.
  
• Claim the tax the issuer withheld on line 437 of your return.

Complete Form T746, Calculating Your Deduction for Refund of Unused RRSP Contributions, to calculate the amount you can deduct for the withdrawal.

Forms and publications

• Guide T4040, RRSPs and Other Registered Plans for Retirement