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by Tara Hauck, CPA, CA
June 20, 2016

RRSP and TFSA Over Contributions

Written by: Tara Hauck, CPA, CA

Registered Retirement Savings Plans (RRSP) and Tax Free Savings Accounts (TFSA) are two ways for Canadians to save their hard earned cash. However, the plans themselves are different:

  • RRSP’s provide a tax deduction in the year of contribution and withdrawals are taxable. 
  • Conversely, contributions to your TFSA are not tax deductible, but withdrawals from the plan are tax-free. 

One similarity between RRSP’s and TFSA’s is that each of these plans has a contribution limit each year and there are consequences for over-contributing to the plans. 

RRSP’s and TSFA’s have maximum annual contribution limits, which accumulate year to year if an individual doesn’t maximize their contributions.  For2016, the maximum annual limits are $25,370 and $5,500 respectively. 

Contributions made in excess of the cumulative RRSP and TSFA contribution room are, at a minimum, subject to a 1% penalty tax calculated on a monthly basis. In the case of a TFSA, over-contributions can be subject to much harsher penalties if the Canada Revenue Agency (CRA) deems them to be deliberately over-contributed, or where there is a non-qualifying or prohibited investment held in the TFSA. 

When you are aware of a TSFA or RRSP over-contribution, there is a special return to complete and file with CRA. 

  • The return for RRSP’s is due 90 days after the end of the year in which the over-contribution arises.
  • The TFSA over-contribution return is due June 30 after the end of the year in which the over-contribution was made.

Where these returns are filed late, they are also subject to late-filing penalties and interest. 

If you think you may have over-contributed to either your RRSP or TFSA, please contact your Manning Elliott advisor to discuss your options. 

Tara Hauck, CPA, CA is a Tax Manager and member of Manning Elliott’s tax team. She advises our individual and corporate clients on a wide range of tax planning and tax compliance matters. To contact Tara, feel free to call her at 604-714-3674 or email her at

The above content is believed to be accurate as of the date of posting. Tax laws are complex and are subject to frequent changes. Professional advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.