Since my contract says that employer will equal to my contribution up to 4%.
So I contribute 4% and my employer contribute 4% as well.
When I compare the Contribution made by me (besides my employer) to RPP (Per Great-West Life, 2018 report) it is not correlated to T4 [box 20, line 207] amount (almost double difference).
Does all this information contain in my T4 [box 20] slip or should I fill my contribution part to RRSP/PRPP form page?
Or maybe I can input my total contribution to T4 [box 20] from Great-West Life, 2018 report (instead of T4 slip information)?
Cause based on: CRA web site: Line 207 – Registered pension plan (RPP) deduction
Here's a couple links that may help understand the Pension Adjustment - Box 52. Many people are confused about the affect of this Box 52 on the actual tax return itself, of which there is none.
"You are required to report this amount on line 206 of your income tax return. This amount does not affect your income, either as earnings or as a deduction, but it can lower how much you can contribute to your Registered Retirement Savings Plan in the following year."
Your pension adjustment is calculated using a formula set by the federal government, and reported in TurboTax in the same way as any tax software would. The pension adjustment represents the value of the pension benefit earned in your pension plan for a given year.
Here's a couple links that may help understand the Pension Adjustment - Box 52. Many people are confused about the affect of this Box 52 on the actual tax return itself, of which there is none.
"You are required to report this amount on line 206 of your income tax return. This amount does not affect your income, either as earnings or as a deduction, but it can lower how much you can contribute to your Registered Retirement Savings Plan in the following year."
Your pension adjustment is calculated using a formula set by the federal government, and reported in TurboTax in the same way as any tax software would. The pension adjustment represents the value of the pension benefit earned in your pension plan for a given year.
I appreciate the added information but it is not fully answering my question, although I think we are close.
When I am done filling in the information and doing the final review of my tax return, I am looking at a year-over-year comparison which clearly shows a value under the "Net Income" section for "RPP" which has a value of box 20 from my T4 instead of box 52 (total RRP contribution for the year). I believe this is wrong.
The total value of my RPP contribution (box 52) should be used to reduce my total net income as it is a tax shelter for the year. Can you explain why the TurboTax software uses the value in box 20 as the amount to shelter and not the total amount from box 52 please.
@steven_van_eyk When your employer contributes to your RPP, these contributions are indeed shown, however they are reflected in Box 52 which has no effect on your actual tax refund or tax payable.
Total contributions to your RPP, if you’re lucky enough to have one, appear in box 52. The amount your employer paid for your pension is equal to box 52 minus box 20. RPP contributions lower the amount you can put into your own Registered Retirement Savings Plan (RRSP). Box 52, then, also reflects the amount by which your RRSP contribution room is reduced.
So I am 100% clear, the full amount of RPP (employee + employer = box 52) can be used as a tax shelter (like an RRSP), correct?
If that is correct, I am a little confused with your first sentence where you state "which has no effect on your actual tax refund or tax payable". Does this mean that TurboTax does not use the value of box 52 automatically in the software or are you saying that box 52 can not be used as part f the RPP tax shelter reduction?
Registered Retirement Savings Plans (RRSP) and Registered Pension Plans (RPP) are both retirement savings plans that are registered with the Canada Revenue Agency. RRSPs are individual retirement plans, while RPPs are plans established by companies to provide pensions to their employees.
The amount in Box 20 of your T4 - RPP, is only reported once, on the T4 screen in TurboTax. This amount is NOT your RRSP contributions, so do not confuse the two.
If your employer contributes to an RRSP on your behalf, you will receive a separate RRSP Contribution slip and need to report it in the RRSP section. You may see something on your T4 in regards to this RRSP, however, it will be in Box 40 of the T4 and is already included in your income. The tax deduction for your RRSPs which are deducted from your pay and "matched" by your employer will be totalled and shown on the RRSP Contribution slip. Also when you contribute to an RRSP through work, you should receive "two" RRSP Contribution slips, one from March to December, and one for the First 60 Days of this year.
I have the exact same question regarding my RPP through GWL. I think the question was asked without any indications that there was a mix up of RPP vs. RRSP and your response clearly indicates you did not read the question properly.
The RPP value on the T4 is only 50% of the total contribution to the RRP. Again, the total contribution to the RPP is 50% by the employee (me) and 50% by the employer.
Steven, I understood from the answer of Kim that RPP contribution 50% your and 50% by employer deduct by our employers before tax applied on it. So no need to report to CRA cause this money already flew under CRA radar.
Kim, correct me if I wrong.
Not such case with RRSP.
It is not just "TurboTax" that isn't using the amount from Box 52, CRA only allows the portion the employee contributes to the RPP as shown in Box 20 to be used as a deduction. On the T1 General Tax Return, Box 52 is a box that is a "side box", not included in the calculation to reduce your Net Income.
I've attached an example of a T1 General Tax Form that shows a 50/50 contribution between the employee/employer, and you can see that only the "employee paid portion" is used to arrive at Net Income.
Here's the CRA information on Line 206 - Pension Adjustment: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-206-pension-adjustment.html
I was looking for the reason why, not confirmation that it was the right thing to do as I saw that in the examples you provided. The reason, as I understand it is that the employer contributions are already sheltered but the employee contributions were not.
As there was no taxable benefit on my T4 for the employer amount contributed to my RPP, I must assume that I was not taxed on that amount and thus it was already sheltered (not seen as income in the first place). In this case, only the employee amount (which I was already taxed on) is included as an income reduction (tax shelter) on the return.
Simple in retrospect. Thank you for your guidance as it did help lead to the explanation I was looking for.
Cheers