Unused RRSP Contributions (2021)

Many Canadians save and invest using their RRSP because of the tax deduction they get when they file their taxes. But what happens when you make an RRSP contribution but decide not to claim the tax deduction?

In this post, you’ll learn about unused RRSP contributions, where to find it and the carry forward rule.

What are Unused RRSP Contributions?

Unused RRSP contributions are the amounts you contributed to your RRSP but have deferred for use on your tax returns in the future.

For example: You contributed $15,000 to your RRSP in a year. When it is time to file your taxes, you decided to deduct only $8,000 from your taxable income for the year.

The remaining $7,000 is your unused RRSP contribution that you can carry forward to future years.

You still have to report all your RRSP contributions when you file your taxes, but it’s your call when you want to claim the deduction.

Any unused RRSP contributions in a year is reported using Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities.

You’ll be able to complete and submit the form using any of the best tax software available to Canadians. But if you’ve filed your taxes, simply download the form and send to the closest tax centre to you.

Reporting all your contributions is important. It ensures that CRA has accurate information and your limits are calculated correctly.

Carry Forward Rules

You can carry forward any unused RRSP contributions to future years to be applied towards your tax returns – even after you turn 71.

So if you think your marginal tax rate will be higher in the future, it may be a good idea to contribute to your RRSP now but delay claiming the RRSP tax deduction.

Unused RRSP Contributions Example

So we’ve got the RRSP deduction limit, available contribution room and unused RRSP contributions.

The 3 of them can be confusing, but the example below should clear things up:

James started working in 2018 and earned a total of $100,000 in 2018 and 2019.

He opened an RRSP account in 2018 but couldn’t make any contributions since he had no earned income from prior years. He contributed $18,000 in 2019 to max out his available contribution room (2018 Income of $100,000 * 18%) and deducted the entire amount from his tax return.

In 2019, he made several contributions to his RRSP totaling $15,000. But when it was time to file his taxes, he decided to deduct only $10,000 and defer the remaining to the future.

Here’s a summary of his transactions over the years

unused rrsp contributions example

Notice that the RRSP deduction limit and available contribution room are the same as long as you deduct all the contributions in the same year you contributed to your RRSP.

Since he deducted the entire $18,000 contribution made during 2019 in his 2019 tax returns, there’s no unused RRSP contribution.

But things start getting trickier in 2020. Out of his available contribution room of $18,000, he only used $15,000. That leaves him with a $3,000 available contribution room to be carried over to 2021.

And because he only deducted $10,000 from his tax return instead of the $15,000 he actually contributed, he now has an unused RRSP contribution of $5,000 that can be carried over to the future.

The deduction limit is the sum of both numbers: $3,000 + $5,000 = $8,000. In other words, he’s allowed to deduct a maximum of $18,000 from his tax return in 2020 but he only deducted $10,000.

In summary, your RRSP Deduction limit = Available contribution room + Unused RRSP contributions.

How do I find my Unused RRSP Contributions?

From the example above, you can see how easy it is to lose track of your RRSP contributions.

Unless you carefully keep track of your contributions, it is quite easy to over-contribute and be subject to the RRSP over-contribution penalty. So it’s good practice to always confirm your limits with CRA.

You can find and confirm your unused RRSP contributions using any of the options below.

1. RRSP Deduction Limit Statement

You can find the statement on your most recent notice of assessment.

Here is a sample of the statement…

sample rrsp deduction limit statement showing unused rrsp contributions

You should receive your notice of assessment via mail after filing your tax if you didn’t sign up for electronic mails. Alternatively, you can login to your MyAccount to download it any time.

2. My Account with CRA

If you have an account, simply login to your account and go to the RRSP and TFSA section on the overview page.

You’ll find details of your RRSP deduction limit, your available contribution room and any unused RRSP contributions.

 3. Use the Tax Information Phone Service (TIPS)

You can get information about your RRSP using the automated phone system by calling 1-800-267-6999.

To use the service, you’ll need to provide some personal details such as social security number, date of birth, total income reported on your tax returns and so on.

You may also receive a Form T1028, Your RRSP Information, if there have been any changes to your deduction limit since CRA’s last assessment.

Unused RRSP Contributions vs Available contribution room

There’s some confusion between the available contribution room and the unused RRSP contributions.

Available contribution room is the amount you’re allowed to contribute to your RRSP in the current year. In other words, it is the maximum RRSP contributions you can make during the year.

You may also know it as unused RRSP contribution room or RRSP contribution limit. And as you’ll see below, the available contribution room is NOT the same as your RRSP deduction limit.

You can check this link for a detailed post explaining the difference between RRSP deduction limit vs contribution limit.

On the other hand, unused RRSP contributions refers to amounts contributed in previous years but yet to be deducted from the contributor’s tax return.

That is, available contribution room is the amount you CAN contribute, while unused RRSP contribution is the amount you HAVE contributed to your RRSP but did not deduct from your taxes.

Both can be carried forward to future years, though you can’t contribute to your RRSP after the year you turn 71.

Unused RRSP Contributions after you turn 71

You can not contribute to an RRSP after Dec 31 of the year you turn 71. This means any available contribution room is lost.

The good news is: you can still deduct any unused RRSP contributions beyond this date.

Here’s a simple example to illustrate it:

Consider Ann that turned 71 in 2020 and earned $100,000 in 2019. Assume she has maximized her RRSP contribution room for previous years, her contribution room for 2020 will be $18,000 (the lower of $100,000 x 18% and $27,230).

She was able to contribute $15,000 to her RRSP during the 2020 RRSP contribution period but decided not to claim the deduction when she filed her tax returns.

This means she has:

  • Available contribution room: $3,000. But she won’t be able to contribute it in 2021. Effectively, the contribution room is lost forever.
  • Unused RRSP contribution: $15,000. She can claim the tax deduction in her tax returns for 2021 or spread it across multiple years if she wants.

The good news is:

She can take advantage of TFSA since there are no age limitation. Check this post for a guide to TFSA.

Also, learn more about RRSP deadlines from the linked post.

What to do with your undeducted RRSP contributions?

If you have unused RRSP contributions, it is up to you whether you want to:

  • Leave it in the plan and claim it on your tax return for future years; or
  • Withdraw the undeducted contributions.

Leaving the unused contributions in the plan is usually the intention. But you may also decide to withdraw the amount.

Any amount withdrawn from your RRSP will still need to be included in your income when you file taxes.

However, you never got a deduction for the contribution so you can claim a deduction to eliminate the income by filing Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP, PRPP, or SPP Contributions from your RRSP.

Some Unused RRSP Contributions FAQs

Can I carry forward unused RRSP contributions?

Yes, you can carry them forward indefinitely. Unlike available contribution room, you can still use your unused RRSP contributions even after the year you turn 71.

What are undeducted RRSP contributions?

These are RRSP contributions you made and reported on your income tax return for prior years, but you’ve not used to reduce your income tax. i.e. you’ve not claimed an RRSP deduction for the contribution.

What can I do with my unused RRSP contributions?

You can either withdraw any undeducted RRSP contributions or carry them forward to be used on your future tax returns.

Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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