I am receiving a severance package from my company this year. Will this be included in my income for purposes of calculating the following year's RSP contribution limit?

I've checked with my former employer, and in 2016, I earned $95,000 in income that will show up in Box 14 of my T4. I also received $124,000 in "retiring allowance" (or severance) that will show up in Box 67 of my T4.

Will both amounts be used to calculate my RSP contribution room for 2017, or only the first amount?

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1 Best answer

New Member

Oct 29, 2019 11:54:12 PM

Only the first amount.

The second amount reported on box 67, end up on line 130 on your tax return. Line 130 is not part of earned income for RRSP limit calculation purposes. See detail formula at http://www.cra-arc.gc.ca/E/pub/tg/t4040/t4040-e.html#stp_2chrt_3 .

New Member

Oct 29, 2019 11:54:12 PM

Only the first amount.

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I am receiving a severance package from my company this year. Will this be included in my income for purposes of calculating the following year's RSP contribution limit?