Can my company knowingly cause me to over contribute on my RRSPs?

My company has RRSP matching which is great however, my yearly bonus goes into RRSPs as well causing me to over contribute. I've asked to receive the bonus non RRSP but they refuse. Can they do that? 


Also if I immediately remove the funds as soon as they are put in can I not claim the RRSP amount that is given in the tax reciept and claim the income on the T4RSP instead? 

Answer

Unfortunately, this sort of thing can happen, and the responsibility rests with you the taxpayer to avoid over contributions. You could attempt to decline your bonus, but there may be no option.  Your annual RRSP limit amount A is the maximum deduction you can make from your 2014 income in any case, regardless of any RRSP withdrawal you choose to make.

With RRSPs, withdrawals can only offset over-contributed amounts, and then only if the taxpayer applies to CRA.

Usually, CRA will look fairly kindly on this situation where a company RRSP plan creates what is called an 'inadvertent overcontribution' , but you should make the withdrawal and submit a T1-OVS to CRA to report the overcontribution and avoid penalties.

Make sure to avoid the situation in future as CRA will be less forgiving.
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