I don't understand RRSP deduction limit - showing balance owing?

[cpye20]

This is my first year filing taxes with an RRSP and I am so very confused right now, so I apologize if this is a silly question...

My income for 2015 was $36k and I contributed about $2100 to an RRSP. My deduction limit for 2015 is $1664 according to my 2014 notice of assessment, based on an income last year of $7400. When I enter the RRSP information, this shows as a balance owing for 2015 of nearly $300. My understanding of the process is that my deduction limit is based on my 2015 income. So why is my limit so low?

The first $200 or so was contributed in the first 60 days of 2015, I entered it as such (not on 2014 T4), and the rest as after the first 60 days. I put in line A as it shows on my NoA. Have I entered something wrong or have I actually gone over my limit and have a balance owing? :(

Thanks!

[Delphision · Accepted solution]

The contribution in the first 60 days of 2015 must be included in the 2014 year.  If you did not do so, you should do a T1 adjustment for 2014.  Due to your low income in 2014, it is likely that you have exceeded your RRSP limit.  You should carry forward $250.00 to next year.  The deduction limit is based on your prior year income among other things, but it is only approximately 18%.

[rjalejo]

Hi! You said that it was your first time to file with an RRSP. Though you have the option of including your first $200 to either be included in TY 2014 or TY 2015, you included this amount on your TY 2015.

CRA determines each "contribution room" to include among other things your previous year's income tax and benefit return. 

Any revision will impact your 2014 RRSP deduction limit and will appear on your notice of reassessment (if any) or in some cases on a T1028. 

You did not mention if you made any changes on your income tax and benefit. 

These changes (if any) will determine your RRSP deduction limit and in most cases, CRA will inform you about the change on your RRSP deduction limit. 

Your unused RRSP deduction room will be carried forward in 2015. 

If you want to calculate your contribution room, see see chart 3 of Guide T4040, RRSPs and Other Registered Plans for Retirement at the CRA website.

[rjalejo]

Even if you do not need to use your RRSP deduction to reduce your taxes for a given year, you still need to report them on your Schedule 7 for that year. If you did not file a Schedule 7 when it was required, complete one for that tax year and submit it to your tax centre. By doing so, you will avoid having your deduction for contributions made in the first 60 days of the year, or in an earlier year, reduced or disallowed.