Hello folks!
I need help:
- i lost my job in November 2019
- i was offered a 5 month severance pay
- the lump sum was transferred directly to my RRSP in January 2020, upon request (therefore, the gross amount, without withholding taxes).
My questions are as follows:
- should i be getting a contribution slip for this amount (for the period of first 60 days of 2020)?
- if so, can i include this in my 2019 income tax return and expect a substantial deduction?
- is it safe to say that the lump sum will appear as income in my 2020 T4?
cheers
This severance package was part of your income in your 2029 T4 slip since it was paid in a lump sum and commonly reported in:
Since you have contributed the amount in your RRSP the first 60 days of 2020 > you will be able to deduct it in your 2019 tax return. The financial institution should have issued you a slip for this contribution.
If it is reported in Box 66 > you can do a direct transfer to your RRSP without reducing your RRSP contribution limit. You will need a letter from the employer to prove that it was a direct transfer.
If it was reported in any other Box > you must have enough room in your RRSP to contribute this amount. > it will reduce your RRSP limit
The amount contributed will be deducted from your income on Line 208 and you will end up paying less taxes for 2019.
I hope this was helpful