Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit

DEFINITION of 'Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit'

The maximum amount that the Canada Revenue Agency (CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liability. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be imposed on the coverage.

BREAKING DOWN 'Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit'

In order to arrive at this contribution limit, the CRA calculates the taxpayer's maximum contribution earned for the year according to his or her annual income. It then deduct transfers of certain qualifying income made to the taxpayer's RRSP throughout the year. Finally, the CRA calculates for pension adjustments using past service pension adjustments and adds back pension adjustment reversals and carries forward any unused RRSP deductions that were not used in previous years.

Deduction limits are shown on your personal Notice of Assessment.

To learn more aboutĀ RRSPs, check outĀ How are Registered Retirement Saving Plans (RRSPs) taxed?

RELATED TERMS
  1. Registered Retirement Savings Plan ...

    The amount that a Canadian taxpayer contributes to his or her ...
  2. Registered Retirement Savings Plan ...

    Assets invested in an RRSP. RRSP contributions can be made at ...
  3. Pension Adjustment - PA

    The amount of contributions that can be made to a Registered ...
  4. Lifelong Learning Plan

    A provision applicable to the Canadian Registered Retirement ...
  5. Schedule A

    Schedule A is a U.S. income tax form that is used by taxpayers ...
  6. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that ...
Related Articles
  1. Taxes

    RRSPs: Introduction

    This tutorial is your one-stop RRSP shop. Here we explore the ins and outs of RRSP planning and investing. Specifically, we look at what an RRSP is, what its advantages are, how you can set one ...
  2. Taxes

    Registered Retirement Savings Plans (RRSP)

    Learn how the Canadian government makes saving for your post-work years easy. We take you from your first contribution to your first withdrawal.
  3. Taxes

    RRSPs: Contributing - Part 2

    Now that we have explored some of the basics of RRSP contributions, let's get into some of the details regarding how a married couple can take full advantage of contribution limits through income ...
  4. Taxes

    RRSPs: Growth

    The growth of an RRSP is determined by its contents. Simply having money in an RRSP is not a guarantee that you may retire comfortably; however, it is a guarantee that the investments will compound ...
  5. Taxes

    RRSPs: Eligibility

    Who Can Set Up an RRSP? After reading about the tax advantages of RRSPs in the previous section, you may be anxious to know whether you're eligible to invest. The good news is that practically ...
  6. Retirement

    What's The Difference Between Retiring In Canada And America?

    American and Canadian governments provide many of the same types of services, but the subtle differences between the two countries are worth noting.
  7. Taxes

    RRSPs: RRIFs

    Once you've retired, getting the money from your RRSP is easy. All you have to do is go to the financial institution that is holding your RRSP account and say that you have retired. Then it's ...
  8. Taxes

    Personal Income Tax Guide: 6 Overlooked Deductions And Credits

    By Ken ClarkDue to the overwhelming and ever-changing nature of the U.S. tax code, most taxpayers can't name more than the three or four of the most commonly deductible expenditures. Not only ...
  9. Taxes

    Why You Should Itemize Your Tax Deductions

    This strategy of moving your tax deductable payments and donations to the following year could mean hundreds more on your return.
  10. Home & Auto

    Calculating the Mortgage Interest Tax Deduction

    The amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.
RELATED FAQS
  1. Is a Registered Retirement Savings Plan (RRSP) taxable in the U.S.?

    Learn how the IRS treats Canadian Registered Retirement Savings Plans that are held by U.S. citizens or residents, and discover ... Read Answer >>
  2. What are the main reasons to obtain a Registered Retirement Savings Plan (RRSP)?

    Learn about some of the major benefits of opening and contributing to a Registered Retirement Savings Plan throughout your ... Read Answer >>
  3. How does a Registered Retirement Savings Plan (RRSP) loan work?

    Discover some of the most common and useful ways to take out a loan from your Registered Retirement Savings Plan without ... Read Answer >>
  4. What are the Registered Retirement Savings Plan (RRSP) contribution limits?

    Review annual contribution limits for Registered Retirement Savings Plans and figure out how much you can invest for your ... Read Answer >>
  5. How and when can you convert a Registered Retirement Savings Plan (RRSP) into a Registered ...

    Discover how and when to convert your Registered Retirement Savings Plan into a Registered Retirement Income Fund, and learn ... Read Answer >>
  6. Can I deduct my Individual Retirement Account (IRA) contribution on my tax return?

    Whether you can deduct IRA contributions on your tax return depends on the type of IRA you have, your participation in an ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center