Canadian Money Forum banner

Pre-tax bonus in RRSP & Filing taxes

16741 Views 5 Replies 4 Participants Last post by  lister
This is the first year that I decided to put my company bonus pre-tax into my RRSP and I'm unsure how I handle that when filling out my taxes this year. For RRSP contributions this year do I include that with my post-tax contributions or does it just get ignored? Logic to me says the latter but who knows with the government?! :p I don't want to make a mistake when filing either shortchanging myself or being in error with the government for receiving too much of a tax refund.
1 - 6 of 6 Posts
Okay second try... I do understand your question. The bonus you put into the RRSP directly counts against your RRSP contribution for the year. Here's an example. Say your RRSP contribution room is $10,000. Your bonus that you put directly in the RRSP is $5,000. You have $5,000 remaining contribution room.
The contribution room I don't care about. Mine is so high right now from years and years of underfunding my RRSP that I'll never max out.

I'll clarify:

The yearly bonus is paid in the next year. So the 2008 bonus was paid in 2009. (The bonus from 2007 was paid in 2008 and is included in my income T4 as it was paid to me and income taxes taken off. I'm not asking about that bonus.) A large chunk of the 2008 bonus was paid ahead of the end of February 2009 while the smaller chunk was paid in March 2009. That smaller chunk I know can't be used at all for filing taxes for 2008. The large chunk could be used for filing taxes for 2008 if I choose depending on what the rules say about pre-tax contributions. However that money was directly put into an RRSP before taxes were taken off (other than CPP and EI.) I also had post-tax contributions too.

So for example:
Post-tax contributions: $2,000
Pre-tax bonus contribution: $10,000

So when filing for 2008, do I say that I've put in $12,000 to my RRSP and thus get a big fat refund or can I only say that I put in $2000 since the $10,000 was pre-tax and so I get a much smaller refund?
See less See more
I did the same thing with gratuities I'd earned at work. While the untaxed contribution was put directly into my RRSP it also showed up as gross earnings on my pay slip (without the income tax being witheld) ..... so come T4 time my gross pay for tax purposes included this contribution and would thus be subject to tax at years end ......sooo I also was able to take the RRSP deduction .

It sounds like you did a similar thing.

So when filing for 2008, do I say that I've put in $12,000 to my RRSP and thus get a big fat refund or can I only say that I put in $2000 since the $10,000 was pre-tax and so I get a much smaller refund?
You can do either, or a combination of both.

You will have to declare both on amounts on schedule 7 as part of your return (lines 2 and 3). Then on line 10 you declare how much you actually want to deduct. Anything left over would appear on your notice of assessment (called "Amount B"), and you include that in line 1 of next year's return.

They have the same program at my work. They always warn us that by using this year's bonus RRSP in last year's tax return puts you at risk of having to pay taxes the following year. If you are going to use the $10k this year, you will have to contribute the same amount next year to your RRSP otherwise you will be stuck with a tax bill.
Ah! The lightbulb finally went on late last night and I get it now. Thanks for the help everyone. :)
1 - 6 of 6 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.