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 ...

    A legal trust registered with the Canada Revenue Agency and used ...
  3. Pension Adjustment - PA

    The amount of contributions that can be made to a Registered ...
  4. Matured RRSP

    A Canadian retirement savings vehicle that is registered with ...
  5. Form 8891

    An IRS form that must be completed by any U.S. citizen or resident ...
  6. Schedule A

    Schedule A is a U.S. income tax form that is used by taxpayers ...
Related Articles
  1. Retirement

    RRSPs: The Benefits

    What an RRSP Is A Registered Retirement Savings Plan, or RRSP, is a special type of investment account designed to help Canadians save for retirement. The main advantage of an RRSP account, as ...
  2. Retirement

    Maxing Out Your RRSP (Canadian)

    Increasing your savings will provide tax benefits - and peace of mind.
  3. Retirement

    RRSPs: Contributing - Part 1

    Contribution Limits Because of the tax benefits provided by RRSPs, the Canadian government has capped the amount of money that can be contributed. (Note: the contribution limit is sometimes called ...
  4. Personal Finance

    Canadians: Smart Ways To Use Your Tax Refund

    Taxes are an annoying annual chore akin to going to the dentist. Luckily, however, some of us get a nice tax refund after the process. It's important to use this refund wisely though, and Canadians ...
  5. Financial Advisor

    Increase Your Tax Refund With Above-The-Line Deductions

    Find out about these deductions and how you can use them to lower your tax bill.
  6. Personal Finance

    7 Expenses You Won't Believe Are Deductible

    Many taxpayers would be surprised to discover some of the things that qualify as legitimate deductions.
  7. Personal Finance

    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.
  8. Personal Finance

    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.
  9. Personal Finance

    11 Tax Deductions You Can't Actually Write Off

    These are some of the most common tax write-offs that you can't really claim.
  10. Retirement

    Traditional IRA Deductibility Limits

    Find out whether you can take a tax deduction on the contributions you make.
RELATED FAQS
  1. What are the main reasons not to get a Registered Retirement Savings Plan (RRSP)?

    Find out some of the reasons why you might want to reconsider opening up a Registered Retirement Savings Plan and instead ... Read Answer >>
  2. Should a Canadian citizen who lives and works in the U.S. continue to contribute ...

    No, a U.S. resident should not contribute to a RRSP account. RRSP contribution rules allow you to contribute a certain percentage ... 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. How does a Canadian RRSP work for US citizen beneficiaries?

    I saw your publication on US beneficiaries of Canadian RRSPs Read Answer >>
  5. What should you consider before taking a loan on your Registered Retirement Savings ...

    Learn about the primary factors you should consider before deciding to take out a loan from your Registered Retirement Savings ... Read Answer >>
  6. How are Registered Retirement Saving Plans (RRSPs) taxed?

    Learn about registered retirement saving plans, and find out how the Government of Canada provides tax benefits for those ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center