RRSP Contribution vs Deduction

The amount entered for "RRSP room" in the form is intended to be the maximum amount you can deduct from your net income for the current tax year. This is shown in your CRA Notice of Assessment as the "RRSP deduction limit for (year)". The CRA's RRSP deduction limit statement has this value, with an example shown below.

It is important to note that the results and considerations on this site use the term 'contribution' and assume your RRSP contribution and deduction are equal. However, it is possible to make a contribution to your RRSP and not deduct the full amount in the current year, and there are situations where it may be beneficial to make a contribution but delay the deduction to a future year. In the example below, the "RRSP deduction limit for 2020" and the "Available Contribution Room for 2020" are equal, as the "Unused RRSP contributions previously reported and available to deduct for 2020" is $0. However, if this person had previously made a contribution and not taken the full deduction, their "RRSP deduction limit for 2020" would be higher than their "RRSP contribution room for 2020."

Description $ Amount
RRSP Deduction Limit for 2019 30,000
Minus: Employer's PRPP contributions for 2019 0
Minus: Allowable RRSP contributions deducted for 2019 18,000
Plus: 18% of 2019 earned income, up to a maximum of $27,320 20,000
Minus: 2019 Pension Adjustment 3,000
Minus: 2020 net past service pension adjustment 0
Plus: 2020 pension adjustment reversal 0
RRSP deduction limit for 2020 29,000
Minus: Unused RRSP contributions previously reported and available to deduct for 2020 0
Available contribution room for 2020 29,000

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