However, the employee also gets a corresponding RRSP deduction
equal to the employer contribution, in addition to his or her own personal contributions (whether byway of payroll deductions or lump sum contributions).
Using the CRA's RRSP Deduction
Limit Statement as a model, Table 5 shows the kind of annual pension accumulation statement the CRA might issue each year.
In such a case, the distribution included in income will be offset by an RRSP deduction
Assuming a bonus is paid in January 2002, is the relevant RRSP deduction
limit the one available for 2001 (as calculated by CCRA based on the year 2000 figures) or the one for 2002 (computed with reference to the 2001 earned income)?
These credits, when added to the RRSP deduction
, can lead to an astonishing 80% income tax refund on the amount invested.
Incredibly, then, for a high-income investor, this third subsidy reduces the true cost of a LSF almost to zero: 30 percent for the LSF credit, 50 per cent for the RRSP deduction
, and 20 per cent for the allowable extra foreign content.
However, the employee is also entitled to deduct the full amount of RRSP contributions, whether made personally or by an employer, within the limits of his RRSP deduction
You should still receive an RRSP contribution slip, and report the amounts as income, claim the RRSP deduction
and complete Schedule 7 with your tax return.
Townson claims that RRSP deductions
benefit "a minority of people, mostly men, mostly at the high end of the income scale.
Table 2: RRSP Contributions 1985-1999 ($millions) RRSP Deductions
Total As Percent RRSP Year Income Amount of Income Limits (a) 1985 307,552 6,672 2.