205 – Registered pension plan (RPP) deduction

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The deduction you can claim for RPP contributions for current service or for past service after 1989 cannot exceed the amount you are deducting for such contributions on line 20700 of your federal income tax return for 2019.

If you did not make RPP contributions for service before 1990 and did not make contributions under a retirement compensation arrangement (see point 13 in the instructions for line 207), the amount you enter on line 205 should correspond to the amount shown in box D of your RL-1 slip. If there is an amount in box D-2 or box D-3 of the RL-1 slip, contact us.

Transfer to an RPP

If the amount on line 20700 of your federal income tax return includes amounts transferred to an RPP (such as a retiring allowance), enter them on line 250 instead of line 205.

Contributions for Service Before 1990 if You Were a Contributor

If you were a contributor, the contributions made to a registered pension plan (RPP) for service before 1990 can be deducted if you meet one of the following conditions:

  • the contributions were made for service during a year in which you contributed to an RPP;
  • the contributions were made for service during a year in which you contribute to another RPP, and you had not signed an agreement before March 28, 1988, with respect to making these contributions.

The deduction includes the contributions made to an RPP for services before 1990 and for which you have not claimed any deduction during a previous taxation year.

The deduction that you may claim on line 205 of the income tax return usually corresponds to the amount entered in box D of the RL-1 slip (see courtesy translation RL-1-T). If an amount is shown in box D-2 of your RL-1 slip, you must do the calculation below to determine the amount of contributions made before 1990.

Calculation of the deduction

The deduction is equal to either amount A or amount B, whichever is less.

A

B

The total amount of the contributions made during a given year or in a previous year for service before 1990, where you were a contributor (amount of the buy-back, including interest)

minus

the total of the amounts deducted with respect to these contributions for any previous year

$5,500 minus

  • the total of the amounts deducted for the yearas contributions for current services or past services after 1989
  • the total of the amounts deducted for the year for services before 1990 where you were a non-contributor
Note
You may claim such a deduction even if you no longer work for the same employer.

Contributions to more than one RPP

If you made contributions to more than one RPP during a given year or a previous year for service before 1990, the maximum deduction that you may claim corresponds to the result of the following calculation:

  • $5,500 minus the amount deducted for the year as contributions to all plans for the following services:
    • current service,
    • past service after 1989,
    • past service before 1990 where you were a non-contributor.

You can carry the excess amount and deduct it during a subsequent year without it being subject to the above-mentioned limit.

Carry-over

You may elect to deduct any amount without exceeding the maximum eligible amount. If the amount of contributions exceeds the maximum eligible deduction, that is $5,500, the excess amount can be carried to and deducted in a subsequent year.

Example

In 2017, Justin contributes $8,000 for service during two consecutive years before 1990. Justin was also contributing to another RPP with another employer.

In 2017, Justin did not contribute to an RPP for current service. However, Justin can deduct an amount of $4 000  for services before 1990 even though he did not contribute to an RPP. For 2018 and 2019, Justin did not contribute to an RPP.

The calculations below are used to determine only the deduction for a contributor.

A

B

Deduction for service before 1990

Contributions to an RPP for a given year or a year prior to 1990, minus the total of the amounts deducted

$5,500 minus the total of the amounts deducted for

  • current service
  • past service after 1989
  • past service before 1990 (non-contributor)

2017

$8,000 - $0 = $8,000

$5,500 − $4,000 = $1,500

$1,500

2018

$8,000 - $1,500 = $6,500

$5,500 − $0 = $5,500

$5,500

2019

$8,000 - $1,500 - $5,500 = $1,000

$5,500 − $0 = $5,500

$1,000

If Justin did not make any contributions for the 2017 taxation year, he may deduct, on line 205 of his income tax return, an amount of $5,500, that is $4,000 for service before 1990 where he did not contribute to an RPP, and an amount of $1,500 for service before 1990 where he did contribute to an RPP.

Contributions for Service Before 1990 if You Were a Non-Contributor

If you were a non-contributor, contributions for service before 1990 can be deducted if

  • you did not contribute to a registered pension plan (RPP) during the period covered by the buy-back of past service;
  • before or after March 28, 1988, you made contributions for service, in accordance with an agreement entered into before March 28, 1988.

The deduction that you may claim on line 205 of the income tax return usually corresponds to the amount entered in box D of the RL-1 slip (see courtesy translation RL-1-T). If an amount is shown in box D-3 of your RL-1 slip, you must do the calculation to determine the amount of contributions made before 1990.

Calculation of the deduction

The deduction is equal to amount A, amount B or amount C, whichever is the least.

A

B

C

The total amount of the contributions made during a given year or in a previous year for service before 1990 where you were an employee who did not contribute to an RPP (amount of the buy-back, including interest)

minus

the total of the amounts deducted with respect to these contributions for any previous year

$5,500

$5,500 $ multiplied by the number of years of service prior to 1990 for which you made contributions

minus

  • the total of the amounts deducted with respect to these contributions for any previous year
  • the total of the amounts deducted with respect to optional contributions for any year prior to 1987
Note
You may claim such a deduction even if you are no longer working for the same employer.

Carry-over

You may elect to deduct any amount without exceeding the maximum eligible amount. If the amount of contributions exceeds the maximum eligible deduction, that is $5,500, the excess amount can be carried to and deducted in a subsequent year.

Example

In 2016, Vincent contributes $18,000 for service during three consecutive years before 1990. During these years, Vincent did not contribute to an RPP. On Vincent's RL-1 slip, an amount of $18,000  will be entered in boxes D and D-3. Vincent may claim the following deductions.

A

B

C

Deduction for service before 1990

Contributions made minus amounts deducted

Maximum

$5,500 multiplied by the number of years of service minus the amounts deducted

2016

$18,000 − $0 = $18,000

$5,500

($5,500 × 3) − $0 = $16,500

$5,500

2017

$18,000 − $5,500 = $12,500

$5,500

($5,500 × 3) − $5,500 = $11,000

$5,500

2018

$18,000 −$11,000 = $7,000

$5,500

($5,500 × 3) − $11,000 = $5,500

$5,500

2019

$18,000 − $16,500 = $1,500

$5,500

($5,500 × 3) − $16,500 = $0

$0

Vincent can deduct up to $16,500 (that is 3 × $5,500) of his $18,000 in contributions. However, he cannot deduct the remaining $1,500.

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