I have received a severance of $21,000. I put $10,000 directly to RRSP and $11,000 paid that was taxed. My T4 shows $11,000 in Box 67. Is it suppose to show $21,000?

As clarification,  employer was able to transfer the $10,000 directly to my RRSP.

Do I still put the $10,000 for RRSP contribution?  I am under my limit.   

Do I put the missing $10,000 as Other Income?

Answer

1 person found this helpful

Severance pay, also called a retiring allowance, may include an eligible portion and a non-eligible portion.

If all of your $21,000 is ineligible, then $21,000 should be noted in Box 67 of your T4.  If $10,00 is an eligible amount then $10,000 should be entered in Box 66 and $11,000 in Box 67 of your T4.  In any case, it appears that your employer has not properly completed your T4 and you should contact them for clarification.

This will affect your RRSP contribution in that if a portion of your severance is eligible, it can be claimed as a deduction without affecting your RRSP contribution room.  If none of it is eligible, then the contribution will affect your contribution room.      For more info, please see http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/rtrns/t4/spcl/trnsfr-eng.html 

Was this answer helpful? Yes No
Default user avatars original
SuperUser
1 additional answer

No answers have been posted

More Actions

People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Do you still have a question?

Ask your question to the community. Most questions get a response in about a day.

Post your question to the community