since the money were contributed in 2021 im thinking i can allocate portion of it to 2020 RRSP and the rest to 2021 RRSP ?
If your 2020 Deduction Limit was $6000, that’s the maximum you can deduct, from 2020 income, full-stop. Any further contribution will show up as an undeducted contribution on your 2020 Notice.
It will also be an excess contribution, and will exceed the allowed $2000 amount that CRA permits without penalties.
You can withdraw all or some of the excess ( you must notify CRA) or let it ride, deduct it in 2021 and accept penalties.
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As per CRA, if you contribute more to your RRSP than your RRSP deduction limit allows, you will have an excess contribution.
Generally, you have to pay a tax of 1% per month on excess contributions that exceed your RRSP/PRPP deduction limit by more than $2,000 unless you:
If you have to pay this 1% tax, fill out a T1-OVP, 2020 Individual Tax Return for RRSP, PRPP and SPP Excess Contributions return and send it to your tax centre. Pay the tax within 90 days after the calendar year to avoid late-filing penalties or interest charged.
You can ask the CRA in writing to consider canceling or waiving the tax if the following two conditions are met:
Include the following with your letter:
Please visit our TurboTax article on RRSPs and Your Tax Return: The Bottom Line and How to Resolve RRSP Over-Contributions to learn more about RRSP contributions.
Thanks for your question. If you contribute more to your RRSP, PRPP or SPP, or your spouse's or common-law partner's RRSP than your RRSP deduction limit allows, you will have an excess contribution.
Generally, you have to pay a tax of 1% per month on excess contributions that exceed your RRSP/PRPP deduction limit by more than $2,000 unless you:
If you have to pay this 1% tax, fill out a T1-OVP, 2020 Individual Tax Return for RRSP, PRPP and SPP Excess Contributionsreturn and send it to your tax centre. Pay the tax within 90 days after the calendar year avoids late-filing penalties or interest charges.