When you transfer funds within an RRSP to a Registered Retirement Income Fund ("RRIF") the nature of the plan changes from a savings plan to an income fund, designed to pay out a retirement income. RRIFs have a minimum amount that is required to be withdrawn periodically, at a minimum annually. More funds can be withdrawn, know as excess amounts. The minimum amount will have no withholding tax applied, whereas the excess amount will have withholding taxes applied. They are both considered income in the year they are received. The transfer of the RRSP funds to a RRIF plan is a direct transfer that will have no income reported nor is a tax deduction afforded. The T4RIF will report both the minimum payment as well as the excess amount, and any taxes withheld.
