If you or your employer contribute at least $2,000 more to your RRSP, or your partner’s RRSP, than your RRSP/PRPP deduction limit for the year, you will have an “Excess Contribution”. Here’s more information from the CRA.
This tax is equal to 1 % per month on Excess Contributions, unless you:
- withdrew the excess amounts, or
- contributed to a qualifying group plan.
If you made an Excess Contribution in the tax year (not in the first 60 days of the next year), you will be subject to a penalty tax by the CRA.
You will need to complete the T1-OVP: Individual Tax Return for RRSP, SPP and PRPP Excess Contributions forms. You must print and mail that form to the CRA.
If you pay the tax within 90 days after the calendar year, you can avoid late-filing penalties or interest charges.