I can buy back a year of pensionable service. The amount exceeds the RRSP available contribution room on my notice of assessment. What would be the implication of this?

[lindsay-marshall]

I am having trouble understanding the relationship between the two, but I thought that contributions to my pension affected how much I could contribute to my RRSP. In addition to the available contribution room for 2021 from the notice of assessment, I did not work in 2021 (maternity leave) so I don't think this available room will increase. Thank you for your assistance! I appreciate it.

[linhph178]

If you choose to buy back a year of pensionable service, that will reduce you RRSP contribution room for that year. Because you did not work in 2021, you stopped contributing to your RRSP. 

If you exceed your contribution room, you will need to pay tax 1% per month on the excess amount 

that exceed your RRSP/PRPP deduction limit by more than $2,000 unless you:

• withdrew the excess amounts
• contributed to a qualifying group plan

For more information, please visit:

TurboTax article RRSPs and Your Tax Return: The Bottom Line

Canada Revenue Agency (CRA) What happens if you go over your RRSP deduction limit?

TurboTax article How to Resolve RRSP Over-Contributions 

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