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jrocha83
Level 1

Can I use capital losses to offset RPP withdrawal

I recently withdrew from my RPP and was hit with a 30% withholding tax. I understand that this withdrawal will also be subject to taxable income. So I was hoping to get some help with 2 questions.

 

1) Will the taxed income be for the full amount of the withdrawn RPP before the withholding tax was applied or the amount AFTER the federal tax hit.

2) If I'm carrying a capital loss from the past couple of years to this tax year. Will I be able to utilize that loss to possibly offset the RPP income?

 

Any help or guidance would be greatly apprecaited.

 

Regards,

JR

4 Replies
TurboTax-Duncan
Level 6

Can I use capital losses to offset RPP withdrawal

Hi, thank you for using Intuit TurboTax Community

The gross amount of the withdrawal will be included as income, you will receive a tax slip from the institution where the funds were invested. The tax withholding is not the final tax liability as you suggested but will be included in total tax withheld to offset federal and provincial tax owing.

Capital losses can only be used to offset capital gains, so, they cannot be used to offset other types of income.

Hope this helps 

jrocha83
Level 1

Can I use capital losses to offset RPP withdrawal

Thank you very much for your response.

 

As a follow up. If my appropriate income tax rate is lower than the withholding tax rate of 30% would this then be reflected in a potential tax return?

 

Appreciate your patience with my questions. This is fairly new to me.

 

Cheers,

JR

TurboTax-Duncan
Level 6

Can I use capital losses to offset RPP withdrawal

Hi, thank you for using Intuit TurboTax Community

The withholding tax rate does not necessarily reflect the actual final tax liability on the T1. If your final tax liability on the T1 is less than your tax withheld, a refund would result. Whether or not the 30% tax withheld was greater then the final average tax rate can only be determined by completing the tax return for the applicable year.

Hope this helps

jrocha83
Level 1

Can I use capital losses to offset RPP withdrawal

Thank you so much. This is very helpful!

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