Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: What amount can be contributed to an RRSP when a person leaves an employer in 2008 and joins a new employers pension plan in 2009?
Position: A general and basic explanation of the relevent law was provided.
Reasons: The RRSP room must be calculated and must take into consideration the PA and PAR in respect of the person's participation in the former employers pension plan.
XXXXXXXXXX 2009-030673
Wayne Harding
July 22, 2009
Dear XXXXXXXXXX :
Re: Determination of RRSP Contribution Room
This is in reply to your letter of January 14, 2009, in which you asked us to confirm you may make certain contributions to your RRSP in 2009.
Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Ruling", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the Internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office, a list of which is available on the "Contact Us" page of the CRA website.
In your situation the amount that can be contributed to your RRSP in 2009 and deducted in 2008 or 2009, may only be determined when all of the relevant information is available. In particular, you need to know your pension adjustment (PA) and pension adjustment reversal (PAR), if any, for each year in respect of your participation in your former employer's registered pension plan. These are generally calculated and provided to you by your former employer. Additional information concerning PA and PAR calculations is available in chapter 6 of CRA's Guide T4040 "RRSPs and Other Registered Plans for Retirement 2008".
Once you have obtained your PA and PAR from your employer you should be able to determine your available RRSP contribution room for 2008 by completing Chart 3 - 2008 RRSP Deduction Limit found in chapter 2 of the guide. You may also estimate your 2009 RRSP Deduction Limit using Chart 3 by substituting the RRSP dollar limit for 2009 on line 28 of the chart. Once you have determined your available RRSP contribution room you can make contributions to your RRSP up to this amount.
We trust that our comments will be of assistance to you.
Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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