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New Member
posted May 7, 2020 11:16:22 PM

My RRSP available room for 2019 was $13,442.00. No contributions were made. The NOA for 2020 shows 2019 deduction limit as negative $7,987?? How can I fix this?

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1 Replies
Level 15
May 8, 2020 4:31:58 PM

Many taxpayers are seeing negative amounts for their RRSP Deduction Limit due to a CRA - Past Service Pension Adjustment or PSPA. This happens when you have a Registered Pension Plan with your employer and an event causes your benefits to increase. 

 

There are many different rules surrounding these PSPA events that you may wish to go over with your employer or the administrator of the Pension Plan. Here is a link to some FAQs from CRA: Past Service Pension Adjustment (PSPA) FAQs

 

As for entering this on your tax return, you can not enter a Negative RRSP Deduction in TurboTax. If you do have a negative number here, CRA will make the adjustments once you file your return with "earned income" and open up more room.

 

If you have a negative number here and have made a contribution when you are considered to have Zero room, you will see an effect from CRA on the Excess Contribution Amount of $2,000 that is allowed. CRA will also adjust your deduction limit when you file to agree with their records showing the negative amount.

 

From this article at TaxTips.ca: RRSP Contribution Limits  A taxpayer can contribute up to the amount of their deduction limit, plus an excess contribution as long as the total excess contribution never exceeds $2,000.  However, the allowed excess will be less than $2,000 when the deduction limit is negative due to a PSPA amount.  Also, only taxpayers who are 19 or older in the taxation year qualify to have an excess amount.  Any excess contribution over $2,000 may be subject to a 1% per month tax.