Excess Contributions
If you (or your employer for pooled registered pension plan (PRPP) purposes) contribute more to your RRSP, PRPP or SPP, or your spouse's or common-law partner's RRSP or SPP than your RRSP deduction limit allows, you will have an excess contribution.
Generally, you have RRSP excess contributions if your unused RRSP, PRPP, and SPP contributions from prior years and your current calendar year contributions are more than your RRSP deduction limit shown on your latest notice of assessment, notice of reassessment, or Form T1028, Your RRSP Information for 2024, plus $2,000.
Also, you can only qualify for the additional $2,000 amount if you were 18 or older at any time in 2023.
Generally, you have to pay a tax of 1% per month on your unused contributions that exceed your RRSP deduction limit by more than $2,000. Your notice of assessment or notice of reassessment will indicate that you may have to pay a 1% tax on RRSP excess contributions if your unused RRSP, PRPP, or SPP contributions exceed your RRSP deduction limit. You can view your RRSP information online by going to My Account for Individuals.
Note
You may not have to pay the 1% tax on all of your excess contributions, if one of the following situations applies:
- you withdrew the excess amounts before the end of the month when the excess contribution was made
- your contributions were qualifying group plan amounts
- the contributions were made before February 27, 1995
If you withdrew the excess amounts under the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP), you may still be required to pay the 1% tax on all of your excess contributions.
If you have to pay this 1% tax, send your completed T1-OVP, 2024 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions to your tax center and pay the tax no later than 90 days after the end of the year in which you had the excess contributions.
Which return you have to use
If you have RRSP excess contributions made from January 1, 1991, to December 31, 2024, that are subject to tax, fill out a T1-OVP-S, 2024 Simplified Individual Tax Return for RRSP, PRPP and SPP Excess Contributions, for each applicable tax year.
Notes
When you file your return, send documents that identify the exact months of all RRSP, PRPP, and SPP contributions and RRSP, PRPP, SPP or RRIF withdrawals you made in 2024. Please note RRSP receipts, T4RSP and T4RIF slips do not contain this information.
If the supporting documents received do not show the exact months of the contributions or withdrawals, the CRA may assess the T1-OVP return based on their records. This means that the CRA would include contributions from the first 60 days of the year in January and include the contributions from the rest of the year in March. As well, the CRA would include the withdrawal(s) in December.
If you made mandatory contributions to a group RRSP or a PRPP plan in 2023 or 2024 that are subject to tax, you must fill out a T1-OVP, 2024 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions, for each applicable tax year.
Notes
When you file your return, include a copy of the contract or collective agreement from your employer or union stating that group contributions are mandatory and a statement confirming the amounts and dates of mandatory contributions and withdrawals for the year.
Also include documents showing the exact months of all RRSP, PRPP and SPP contributions and RRSP, PRPP, SPP, or RRIF withdrawals you made in 2024. Please note RRSP receipts, T4RSP and T4RIF slips do not contain this information.
If the supporting documents received do not show the exact months of the contributions or withdrawals, the CRA may assess the T1-OVP return based on their records. This means that the CRA would include contributions from the first 60 days of the year in January and include the contributions from the rest of the year in March. As well, the CRA would include the withdrawal(s) in December.
If you would like the CRA to complete the return(s) for you, send us written authorization and the supporting documents mentioned above for the year(s) in question.
Waiver or cancellation of the RRSP excess contribution tax
If you determined that you must pay a tax on your RRSP excess contributions, you may ask in writing that we waive or cancel the tax if both of the following conditions are met:
- your excess contributions on which the tax is based arose due to a reasonable error
- you are taking, or have taken, reasonable steps to eliminate the excess contributions
Note
A waiver refers to penalties and interest otherwise payable by a taxpayer for which relief is granted by the CRA before this amount is assessed or charged to the taxpayer. A cancellation refers to the amount of tax that was assessed or charged to the taxpayer for which relief is granted by the CRA.
To consider your request, we will need you to fill out Form RC2503, Request for Waiver or Cancellation of Part X.1 Tax – RRSP, PRPP and SPP Excess Contribution Tax. Your form should explain:
- why you made excess contributions and why this is a reasonable error
- what steps you are taking, or have taken, to eliminate the excess contributions
Send your completed request and supporting documents that identify the exact months of all your RRSP, PRPP, and SPP contributions and RRSP, PRPP, SPP or RRIF withdrawals for the years involved, as well as any documents that would support the explanation of the reasonable error that caused the excess contribution to the tax center as shown on your notice of assessment or reassessment. Please note that we do not accept the official RRSP receipts or the T4RSP or T4RIF slips for this purpose as they do not contain the exact months of all your contributions or withdrawals.
Note
If the CRA does not waive or cancel the tax, and the supporting documents received do not show the exact months of the contributions or withdrawals, the CRA may (re)assess the T1-OVP return(s) based on their records. This means that the CRA would include contributions from the first 60 days of the year in January and include the contributions from the rest of the year in March. As well, the CRA would include the withdrawal(s) in December.
For more information on cancellation or waiver of late-filing penalties and interest, see Information Circular IC07-1R1, Taxpayer Relief Provisions.
How does a voluntary disclosure work
If you realize the information you gave to the CRA is wrong or incomplete, you may be able to make a voluntary disclosure. To see if your disclosure qualifies for this program, go to Voluntary Disclosures Program (VDP).
Note
This program does not apply to any tax return for which we have started a review.
For more information and to know if your disclosure qualifies for this program, refer to Information Circular IC00-1R6, Voluntary Disclosures Program.
Be sure to indicate clearly, on any disclosure you make, that you are submitting information under the Voluntary Disclosures Program.
Late filing penalties
The CRA will charge a late filing penalty if you do not file your T1-OVP, 2024 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions return on time. The due date for filing the T1-OVP is 90 days after the end of the calendar year.
The penalty is:
- 5% of your balance owing
plus - 1% of your balance owing for each month that your T1-OVP return is late, to a maximum of 12 months
Your late filing penalty may be higher if CRA charged you a late-filing penalty on your T1-OVP return for any of the three previous years.
Interest charges
Interest is compounded daily on:
- unpaid tax calculated on your T1-OVP, 2024 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions
- unpaid late filing penalty
CRA calculates interest starting on the 91st day of the following year.
For more information on relief of late filing penalties and interest, see Information Circular IC07-1, Taxpayer Relief Provisions.
Forms and publications
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