Hi,
Before I get into the details, here is some background on the scenario (the numbers are hypothetical, just to make the example easier to follow):
In the RRSP contribution section of the filing:
Then at the end of the process, it provides an error message which states:
I believe I am answering the questions correctly, so why is this error occurring? Rather than unlocking the RPP and receiving a taxed cash payment, it was transferred directly to the RRSP. This follows the definition of a designated transfer, and from what I understand a transfer between a RPP to RRSP should be noted in the filing, so I am not sure why this error message is appearing.
Please let me know if I am misinterpreting anything. Any guidance on this issue would be greatly appreciated. Thanks in advance.
What is likely happening here is TurboTax is not recognizing any amounts of your Transfer as "Eligible" as you do not have an income slip showing Eligible or Ineligible amounts. This would happen if you did not receive your severance or retiring allowance until 2020 and both Box 66 and 67 of your 2019 T4 are blank.
If this is the case, the following explains this in greater detail.
When a designated transfer takes place in the first 60 days of the year (2020), the contribution receipt received for the transfer must be reported on the previous taxation year (2019).
Thank you for your reply. I have a few quick follow up questions on this topic, as I want to make sure the fields are input correctly in the RRSP section:
Your guidance thus far has helped as I try to understand the RRSP error I am receiving, so please let me know your inputs when you have a chance. Thanks again.
Thanks for providing us with this extra information. When a true direct transfer takes place, such as you have just described, you will not receive any tax slips. So no contribution slip and no income slip means you do not have to report anything on your tax return.
It used to be the way up until a few years ago that anytime a "Direct Transfer" took place, there were no tax slips issued and nothing was reported on the tax return.
In your case, even though you did not use the T2151 form, a suitable alternative was used and no tax slips were issued, making it so much easier to report, or not report the transfer. You do not need to report anything as you have no slips to report 🙂
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