Payments From an RRSP, a VRSP, a PRPP or a RRIF
You must make source deductions of income tax on the following payments:
- single payments from:
- a registered retirement savings plan (RRSP),
- a voluntary registered savings plan (RVSP), or
- a pooled registered pension plan (PRPP);
- payments from an RRSP that are not periodic annuity payments;
- periodic annuity payments from a VRSP or a PRPP;
- portion of payments made from a RRIF that exceeds the minimum amount.
Payment from an RRSP
Do not withhold income tax on periodic annuity payments from an RRSP. However, withhold income tax at a rate of 15% on:
- single payments from an RRSP;
- payments that are not periodic annuity payments; and
- single payments under a modified RRSP (plan that ceased to be registered as an RRSP before May 26, 1976).
- If you pay a monthly periodic annuity of $1,000 from an RRSP, you are not required to withhold income tax on the payment.
- If you make a single payment of $6,000 from an RRSP, you are required to withhold $900 ($6,000 x 15%) as income tax from the payment.
Payment from a VRSP or a PRPP
Payment from a RRIF
Use the usual method to withhold income tax from the portion of a periodic payment from a RRIF that exceeds the minimum amount.
In the case of a single payment, withhold 15% income tax on the portion of the payment that exceeds the minimum amount.
The portion of a payment from a RRIF that represents the minimum amount is not subject to source deductions of income tax, regardless of whether it is a periodic or a single payment.
Transfer of payments
You are not required to withhold income tax on single payments from an RRSP, a VRSP a PRPP or a RRIF if the amounts are transferred directly to another plan (RRSP, VRSP, PRPP, RPP or RRIF) without being paid to the beneficiary.
If only a portion of the payment is transferred directly to another plan, you must withhold income tax from the portion that is not transferred directly.
You are not required to withhold income tax from any of the following amounts from an RRSP:
- amounts withdrawn under the Home Buyers' Plan (HBP), to a maximum of $35,000;
- amounts withdrawn under the Lifelong Learning Plan (LLP), to a maximum of $10,000 per year and $20,000 for the LLP participation period; and
- amounts you can reasonably consider to be a refund received for undeducted contributions previously made to an RRSP that the beneficiary may deduct in his or her income tax return.