I recently quit a union job with a pension where it made sense to cash out my pension rather than let it mature. Before quitting I was on education leave where my pension contributions were deferred with the intention that when I come back to work I repay the back amount. I quit before this happened so when I cashed out my pension there was a deduction to my total payout that reflected the owed amount.
I just received my T4A forms for the pension payout and the payment amount in box 18 reflects the value before my deduction was taken.
I contacted my pension fund and they told me that the T4A must reflect the value of the pension they paid out, not the value minus the deduction. In rough numbers the gross value was ~$13,000.00 with a deduction of ~$3,000.00 pre-tax. But when they paid out my lump sum, the taxes taken at the time reflected the total after deduction. This has resulted in my owing the CRA a lot in taxes instead of getting a return.
My question then is, can I claim the deduction amount against my earned income? Either as a lump sum pension contribution or a reduction in income in the last year?
You should contact the CRA directly and check with them if there is a way for you to deduct his amount. If you are in Canada or the United States, you can call them at 1-800-959-8281. This page has more ways to contact the CRA: https://www.canada.ca/en/revenue-agency/corporate/contact-information/telephone-numbers.html
As TurboTax Susan said, you should contact CRA in regards to this. The following CRA newsletter has more information regarding claiming a deduction for this amount.
To sum it up:
You'll find more information in this link: Newsletter no. 18-1, Repayments to Registered Pension Plans