Tax wiki
s. 204.2
PART X.1 — Tax in Respect of Over-contributions to Deferred Income Plans
Definition of
Not yet annotated · Text current to 2026-06-21 · section last amended 2024-06-20
Current text
Excess amount for a year in respect of registered retirement savings plans of an individual at a particular time means,
where the excess amount is for a year after 1990, nil; and
where the excess amount is for a year before 1991, the amount, if any, by which the total of
all amounts paid by the individual to such plans under which the individual or the individual’s spouse or common-law partner is the annuitant, other than amounts
to which paragraph 60(j), 60(j.01), 60(j.1), 60(j.2) or 60(l) applies or would, if the individual were resident in Canada throughout the year, apply, or
transferred to the plan in accordance with any of subsections 146(16), 147(19) and 147.3(1) and 147.3(4) to 147.3(7), and
all gifts made to such a plan under which the individual is the annuitant, other than gifts made thereto by the individual’s spouse or common-law partner,
in the year and before the particular time, exceeds the total of
all amounts that may be deducted in computing the individual’s income for the immediately preceding year in respect of those payments, and
the greater of $5,500 and the amount that may be deducted in computing the individual’s income for the year in respect of those payments.
Cumulative excess amount in respect of RRSPs
(1.1)The cumulative excess amount of an individual in respect of registered retirement savings plans at any time in a taxation year is the amount, if any, by which
the amount of the individual’s undeducted RRSP premiums at that time
exceeds
the amount determined by the formula
A + B + R + C + D + E
where
is the individual’s unused RRSP deduction room at the end of the preceding taxation year,
is the amount, if any, by which
the lesser of the RRSP dollar limit for the year and 18% of the individual’s earned income (as defined in subsection 146(1)) for the preceding taxation year
exceeds the total of all amounts each of which is
the individual’s pension adjustment for the preceding taxation year in respect of an employer, or
a prescribed amount in respect of the individual for the year,
is, where the individual attained 18 years of age in a preceding taxation year, $2,000, and in any other case, nil,
is the group plan amount in respect of the individual at that time,
is, where the individual attained 18 years of age before 1995, the individual’s transitional amount at that time, and in any other case, nil, and
is the individual’s total pension adjustment reversal for the year.
Undeducted RRSP premiums
(1.2)For the purposes of subsection 204.2(1.1) and the description of K in paragraph 204.2(1.3)(a), the amount of undeducted RRSP premiums of an individual at any time in a taxation year is the amount determined by the formula
H + I - J
where
is for taxation years ending before 1992, nil, and for taxation years ending after 1991, the amount, if any, by which
the amount of the individual’s undeducted RRSP premiums at the end of the immediately preceding taxation year
exceeds
the total of the amounts, each of which is an amount that is
deducted in or before that preceding year, under subsections 146(5) and 146(5.1) in computing the individual’s income for the immediately preceding taxation year, to the extent that each amount was deducted in respect of premiums paid under registered retirement savings plans, or
contributed in the immediately preceding taxation year by the individual’s employer or former employer to an account of the individual under a pooled registered pension plan,
is the total of all amounts each of which is
a premium (within the meaning assigned by subsection 146(1)) paid by the individual in the year and before that time under a registered retirement savings plan under which the individual or the individual’s spouse or common-law partner was the annuitant (within the meaning assigned by subsection 146(1)) at the time the premium was paid, other than
an amount paid to the plan in the first 60 days of the year and deducted in computing the individual’s income for the immediately preceding taxation year,
an amount paid to the plan in the year and deducted under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year,
an amount transferred to the plan on behalf of the individual in accordance with any of subsections 146(16), 146.6(7), 147(19), 147.3(1) and (4) to (7) and 147.5(21) or in circumstances to which subsection 146(21) applies,
an amount deductible under subsection 146(6.1) in computing the individual’s income for the year or a preceding taxation year,
where the individual is a non-resident person, an amount that would, if the individual were resident in Canada throughout the year and the immediately preceding taxation year, be deductible under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year, or
an amount paid to the plan in the year that is not deductible in computing the individual’s income for the year because of subparagraph 146(5)(a)(iv.1) or 146(5.1)(a)(iv),
a gift made in the year and before that time to a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), other than a gift made thereto by the individual’s spouse or common-law partner, or
an amount contributed in the year and before that time by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan, and
is the amount, if any, by which
the total of all amounts each of which is
an amount received by the individual in the year and before that time out of or under a pooled registered pension plan, a registered retirement savings plan, a registered retirement income fund or a specified pension plan and included in computing the individual’s income for the year, or
an amount included in computing the individual’s income for the year under any of subsections 146.01(4) to (6) and 146.02(4) to (6)
exceeds
the amount deducted under paragraph 60(l) in computing the individual’s income for the year.
Group plan amount
(1.3)For the purposes of this section, the group plan amount in respect of an individual at any time in a taxation year is the lesser of
the lesser of the value of F and the amount determined by the formula
F - (G - K)
where
is the lesser of
the total of all amounts each of which is a qualifying group plan amount in respect of the individual, to the extent that the amount is included in determining the value of I in subsection (1.2) in respect of the individual at that time, and
the RRSP dollar limit for the following taxation year,
is the amount that would be determined under paragraph 204.2(1.1)(b) in respect of the individual at that time if the values of C, D and E in that paragraph were nil, and
is
where the year is the 1996 taxation year, the amount, if any, by which the amount of the individual’s undeducted RRSP premiums at the beginning of the year exceeds the individual’s cumulative excess amount in respect of registered retirement savings plans at the end of the 1995 taxation year, and
in any other case, the group plan amount in respect of the individual at the end of the preceding taxation year, and
the amount that would be the individual’s cumulative excess amount in respect of registered retirement savings plans at that time if the value of D in paragraph 204.2(1.1)(b) were nil.
Qualifying group plan amount
(1.31)For the purposes of the description of F in paragraph (1.3)(a), a qualifying group plan amount in respect of an individual is a premium paid under a registered retirement savings plan or an amount contributed by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan if
the plan is part of a qualifying arrangement or is a pooled registered pension plan,
the premium or contribution is an amount to which the individual is entitled for services rendered by the individual (whether or not as an employee), and
the premium or contribution was remitted to the plan on behalf of the individual by the person or body of persons that is required to remunerate the individual for the services, or by an agent for that person or body,
but does not include the part, if any, of a premium or contribution that, by making (or failing to make) an election or exercising (or failing to exercise) any other right under the plan after beginning to participate in the plan and within 12 months before the time the premium was paid or the contribution was made, the individual could have prevented the premium or contribution and that would not as a consequence have been required to be remitted on behalf of the individual to another registered retirement savings plan or pooled registered pension plan or to a money purchase provision of a registered pension plan.
Qualifying arrangement
(1.32)For the purpose of paragraph 204.2(1.31)(a), a qualifying arrangement is an arrangement under which premiums that satisfy the conditions in paragraphs 204.2(1.31)(b) and 204.2(1.31)(c) are remitted to registered retirement savings plans on behalf of two or more individuals, but does not include an arrangement where it is reasonable to consider that one of the main purposes of the arrangement is to reduce tax payable under this Part.
Deemed receipt where RRSP or RRIF amended
(1.4)For the purposes of subsection 204.2(1.2),
where an amount in respect of a registered retirement savings plan has been included in computing an individual’s income pursuant to paragraph 146(12)(b), that amount shall be deemed to have been received by the individual out of the plan at the time referred to in that paragraph; and
where an amount in respect of a registered retirement income fund has been included in computing an individual’s income pursuant to paragraph 146.3(11)(b), that amount shall be deemed to have been received by the individual out of the fund at the time referred to in that paragraph.
Transitional amount
(1.5)For the purpose of the description of E in paragraph 204.2(1.1)(b), an individual’s transitional amount at any time in a taxation year is the lesser of
$6,000, and
where the value of L is nil, nil, and in any other case, the amount determined by the formula
L - M
where
is the amount, if any, by which
the amount that would be determined under subsection 204.2(1.2) to be the amount of the individual’s undeducted RRSP premiums at that time if
the value of I in that subsection were determined for the 1995 taxation year without including premiums paid after February 26, 1995,
the value of I in that subsection were nil for the 1996 and subsequent taxation years, and
the value of J in that subsection were determined for the 1995 and subsequent taxation years without including the part, if any, of an amount received by the individual out of or under a registered retirement savings plan or registered retirement income fund that can reasonably be considered to be in respect of premiums paid after February 26, 1995 by the individual under a registered retirement savings plan
exceeds
the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the individual’s income for a preceding taxation year, to the extent that the amount was deducted in respect of premiums paid after that year (other than premiums paid before February 27, 1995), and
is the amount that would be determined by the formula in paragraph 204.2(1.1)(b) in respect of the individual at that time if the values of D and E in that paragraph were nil and section 257 did not apply to that formula.
Where terminated plan deemed to continue to exist
(2)Notwithstanding paragraph 146(12)(a), for the purposes of this Part, where a registered retirement savings plan ceases to exist and a payment or transfer of funds out of that plan has been made to which subsection 146(16) applied, if an individual’s excess amount for a year in respect of registered retirement savings plans would have been greater had that plan not ceased to exist, for the purpose of computing the excess amount for a year in respect of registered retirement savings plans for so long as the individual or the individual’s spouse or common-law partner is the annuitant under any registered retirement savings plan under which an annuity has not commenced to be paid to the annuitant, the plan that ceased to exist shall be deemed to remain in existence and the individual or the individual’s spouse or common-law partner, as the case may be, shall be deemed to continue to be the annuitant thereunder.
When retirement savings plan deemed to be a registered plan
(3)Where a retirement savings plan under which an individual or the individual’s spouse or common-law partner is the annuitant (within the meaning assigned by subsection 146(1)) is accepted by the Minister for registration, for the purpose of determining
the amount of undeducted RRSP premiums of the individual at any time, and
the excess amount for a year in respect of registered retirement savings plans of the individual at any time,
the retirement savings plan shall be deemed to have become a registered retirement savings plan on the later of the day on which the plan came into existence and May 25, 1976.
Definition of
(4)Excess amount at any time for a trust governed by a deferred profit sharing plan means the total of all amounts each of which is
such portion of the total of all contributions made to the trust before that time and after May 25, 1976 by a beneficiary under the plan, other than
contributions that have been deducted by the beneficiary under paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,
amounts transferred to the plan on behalf of the beneficiary in accordance with subsection 147(19), or
the portion of the contributions (other than contributions referred to in subparagraphs 204.2(4)(a)(i) and 204.2(4)(a)(ii)) made by the beneficiary in each calendar year before 1991 not in excess of $5,500,
as has not been returned to the beneficiary before that time; or
a gift received by the trust before that time and after May 25, 1976.
PRPP withdrawals
(5)Notwithstanding the Pooled Registered Pension Plans Act or any similar law of a province, a member of a PRPP may withdraw an amount from the member’s account under the PRPP to reduce the amount of tax that would otherwise be payable by the member under this Part, to the extent that the reduction cannot be achieved by withdrawals from plans other than PRPPs.
Source: Justice Laws Website. Not an official version.
Historic text
Immediately preceding version, in force from 2023-06-22 to 2024-06-19:
Show the text in force 2023-06-22 to 2024-06-19
Definition of excess amount for a year in respect of registered retirement savings plans
204.2 (1) Excess amount for a year in respect of registered retirement savings plans of an individual at a particular time means,
(a) where the excess amount is for a year after 1990, nil; and
(b) where the excess amount is for a year before 1991, the amount, if any, by which the total of
(i) all amounts paid by the individual to such plans under which the individual or the individual’s spouse or common-law partner is the annuitant, other than amounts
(A) to which paragraph 60(j), 60(j.01), 60(j.1), 60(j.2) or 60(l) applies or would, if the individual were resident in Canada throughout the year, apply, or
(B) transferred to the plan in accordance with any of subsections 146(16), 147(19) and 147.3(1) and 147.3(4) to 147.3(7), and
(ii) all gifts made to such a plan under which the individual is the annuitant, other than gifts made thereto by the individual’s spouse or common-law partner,
in the year and before the particular time, exceeds the total of
(iii) all amounts that may be deducted in computing the individual’s income for the immediately preceding year in respect of those payments, and
(iv) the greater of $5,500 and the amount that may be deducted in computing the individual’s income for the year in respect of those payments.
Cumulative excess amount in respect of RRSPs
(1.1) The cumulative excess amount of an individual in respect of registered retirement savings plans at any time in a taxation year is the amount, if any, by which
(a) the amount of the individual’s undeducted RRSP premiums at that time
exceeds
(b) the amount determined by the formula
A + B + R + C + D + E
where
Ais the individual’s unused RRSP deduction room at the end of the preceding taxation year,Bis the amount, if any, by which(i) the lesser of the RRSP dollar limit for the year and 18% of the individual’s earned income (as defined in subsection 146(1)) for the preceding taxation year
exceeds the total of all amounts each of which is
(ii) the individual’s pension adjustment for the preceding taxation year in respect of an employer, or
(iii) a prescribed amount in respect of the individual for the year,
Undeducted RRSP premiums
(1.2) For the purposes of subsection 204.2(1.1) and the description of K in paragraph 204.2(1.3)(a), the amount of undeducted RRSP premiums of an individual at any time in a taxation year is the amount determined by the formula
H + I - J
where
His for taxation years ending before 1992, nil, and for taxation years ending after 1991, the amount, if any, by which(a) the amount of the individual’s undeducted RRSP premiums at the end of the immediately preceding taxation year
exceeds
(b) the total of the amounts deducted under subsections 146(5) and 146(5.1) in computing the individual’s income for the immediately preceding taxation year, to the extent that each amount was deducted in respect of premiums paid under registered retirement savings plans in or before that preceding year,
(a) a premium (within the meaning assigned by subsection 146(1)) paid by the individual in the year and before that time under a registered retirement savings plan under which the individual or the individual’s spouse or common-law partner was the annuitant (within the meaning assigned by subsection 146(1)) at the time the premium was paid, other than
(i) an amount paid to the plan in the first 60 days of the year and deducted in computing the individual’s income for the immediately preceding taxation year,
(ii) an amount paid to the plan in the year and deducted under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year,
(iii) an amount transferred to the plan on behalf of the individual in accordance with any of subsections 146(16), 147(19), 147.3(1) and (4) to (7) and 147.5(21) or in circumstances to which subsection 146(21) applies,
(iv) an amount deductible under subsection 146(6.1) in computing the individual’s income for the year or a preceding taxation year,
(v) where the individual is a non-resident person, an amount that would, if the individual were resident in Canada throughout the year and the immediately preceding taxation year, be deductible under paragraph 60(j), 60(j.1), 60(j.2) or 60(l) in computing the individual’s income for the year or the immediately preceding taxation year, or
(vi) an amount paid to the plan in the year that is not deductible in computing the individual’s income for the year because of subparagraph 146(5)(a)(iv.1) or 146(5.1)(a)(iv),
(b) a gift made in the year and before that time to a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1)), other than a gift made thereto by the individual’s spouse or common-law partner, or
(c) an amount contributed in the year and before that time by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan, and
(a) the total of all amounts each of which is
(i) an amount received by the individual in the year and before that time out of or under a pooled registered pension plan, a registered retirement savings plan, a registered retirement income fund or a specified pension plan and included in computing the individual’s income for the year, or
(ii) an amount included in computing the individual’s income for the year under any of subsections 146.01(4) to (6) and 146.02(4) to (6)
exceeds
(b) the amount deducted under paragraph 60(l) in computing the individual’s income for the year.
Group plan amount
(1.3) For the purposes of this section, the group plan amount in respect of an individual at any time in a taxation year is the lesser of
(a) the lesser of the value of F and the amount determined by the formula
F - (G - K)
where
Fis the lesser of(i) the total of all amounts each of which is a qualifying group plan amount in respect of the individual, to the extent that the amount is included in determining the value of I in subsection (1.2) in respect of the individual at that time, and
(ii) the RRSP dollar limit for the following taxation year,
(i) where the year is the 1996 taxation year, the amount, if any, by which the amount of the individual’s undeducted RRSP premiums at the beginning of the year exceeds the individual’s cumulative excess amount in respect of registered retirement savings plans at the end of the 1995 taxation year, and
(ii) in any other case, the group plan amount in respect of the individual at the end of the preceding taxation year, and
(b) the amount that would be the individual’s cumulative excess amount in respect of registered retirement savings plans at that time if the value of D in paragraph 204.2(1.1)(b) were nil.
Qualifying group plan amount
(1.31) For the purposes of the description of F in paragraph (1.3)(a), a qualifying group plan amount in respect of an individual is a premium paid under a registered retirement savings plan or an amount contributed by an employer or former employer of the individual to an account of the individual under a pooled registered pension plan if
(a) the plan is part of a qualifying arrangement or is a pooled registered pension plan,
(b) the premium or contribution is an amount to which the individual is entitled for services rendered by the individual (whether or not as an employee), and
(c) the premium or contribution was remitted to the plan on behalf of the individual by the person or body of persons that is required to remunerate the individual for the services, or by an agent for that person or body,
but does not include the part, if any, of a premium or contribution that, by making (or failing to make) an election or exercising (or failing to exercise) any other right under the plan after beginning to participate in the plan and within 12 months before the time the premium was paid or the contribution was made, the individual could have prevented the premium or contribution and that would not as a consequence have been required to be remitted on behalf of the individual to another registered retirement savings plan or pooled registered pension plan or to a money purchase provision of a registered pension plan.
Qualifying arrangement
(1.32) For the purpose of paragraph 204.2(1.31)(a), a qualifying arrangement is an arrangement under which premiums that satisfy the conditions in paragraphs 204.2(1.31)(b) and 204.2(1.31)(c) are remitted to registered retirement savings plans on behalf of two or more individuals, but does not include an arrangement where it is reasonable to consider that one of the main purposes of the arrangement is to reduce tax payable under this Part.
Deemed receipt where RRSP or RRIF amended
(1.4) For the purposes of subsection 204.2(1.2),
(a) where an amount in respect of a registered retirement savings plan has been included in computing an individual’s income pursuant to paragraph 146(12)(b), that amount shall be deemed to have been received by the individual out of the plan at the time referred to in that paragraph; and
(b) where an amount in respect of a registered retirement income fund has been included in computing an individual’s income pursuant to paragraph 146.3(11)(b), that amount shall be deemed to have been received by the individual out of the fund at the time referred to in that paragraph.
Transitional amount
(1.5) For the purpose of the description of E in paragraph 204.2(1.1)(b), an individual’s transitional amount at any time in a taxation year is the lesser of
(a) $6,000, and
(b) where the value of L is nil, nil, and in any other case, the amount determined by the formula
L - M
where
Lis the amount, if any, by which(i) the amount that would be determined under subsection 204.2(1.2) to be the amount of the individual’s undeducted RRSP premiums at that time if
(A) the value of I in that subsection were determined for the 1995 taxation year without including premiums paid after February 26, 1995,
(B) the value of I in that subsection were nil for the 1996 and subsequent taxation years, and
(C) the value of J in that subsection were determined for the 1995 and subsequent taxation years without including the part, if any, of an amount received by the individual out of or under a registered retirement savings plan or registered retirement income fund that can reasonably be considered to be in respect of premiums paid after February 26, 1995 by the individual under a registered retirement savings plan
exceeds
(ii) the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the individual’s income for a preceding taxation year, to the extent that the amount was deducted in respect of premiums paid after that year (other than premiums paid before February 27, 1995), and
Where terminated plan deemed to continue to exist
(2) Notwithstanding paragraph 146(12)(a), for the purposes of this Part, where a registered retirement savings plan ceases to exist and a payment or transfer of funds out of that plan has been made to which subsection 146(16) applied, if an individual’s excess amount for a year in respect of registered retirement savings plans would have been greater had that plan not ceased to exist, for the purpose of computing the excess amount for a year in respect of registered retirement savings plans for so long as the individual or the individual’s spouse or common-law partner is the annuitant under any registered retirement savings plan under which an annuity has not commenced to be paid to the annuitant, the plan that ceased to exist shall be deemed to remain in existence and the individual or the individual’s spouse or common-law partner, as the case may be, shall be deemed to continue to be the annuitant thereunder.
When retirement savings plan deemed to be a registered plan
(3) Where a retirement savings plan under which an individual or the individual’s spouse or common-law partner is the annuitant (within the meaning assigned by subsection 146(1)) is accepted by the Minister for registration, for the purpose of determining
(a) the amount of undeducted RRSP premiums of the individual at any time, and
(b) the excess amount for a year in respect of registered retirement savings plans of the individual at any time,
the retirement savings plan shall be deemed to have become a registered retirement savings plan on the later of the day on which the plan came into existence and May 25, 1976.
Definition of excess amount for a DPSP
(4) Excess amount at any time for a trust governed by a deferred profit sharing plan means the total of all amounts each of which is
(a) such portion of the total of all contributions made to the trust before that time and after May 25, 1976 by a beneficiary under the plan, other than
(i) contributions that have been deducted by the beneficiary under paragraph 60(k) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952,
(ii) amounts transferred to the plan on behalf of the beneficiary in accordance with subsection 147(19), or
(iii) the portion of the contributions (other than contributions referred to in subparagraphs 204.2(4)(a)(i) and 204.2(4)(a)(ii)) made by the beneficiary in each calendar year before 1991 not in excess of $5,500,
as has not been returned to the beneficiary before that time; or
(b) a gift received by the trust before that time and after May 25, 1976.
PRPP withdrawals
(5) Notwithstanding the Pooled Registered Pension Plans Act or any similar law of a province, a member of a PRPP may withdraw an amount from the member’s account under the PRPP to reduce the amount of tax that would otherwise be payable by the member under this Part, to the extent that the reduction cannot be achieved by withdrawals from plans other than PRPPs.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 204.2
- 1994, c. 7, Sch. VIII, s. 117, c. 21, s. 92
- 1995, c. 3, s. 49
- 1996, c. 21, s. 51
- 1998, c. 19, s. 49
- 2000, c. 12, s. 142
- 2012, c. 31, s. 43
- 2017, c. 33, s. 65
- 2023, c. 26, s. 58
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 204.2 links to the one before it.
Enacting and amending legislation
- R.S., 1985, c. 1 (5th Supp.), s. 204.2; 1994, c. 7, Sch. VIII, s. 117, c. 21, s. 92; 1995, c. 3, s. 49; 1996, c. 21, s. 51; 1998, c. 19, s. 49; 2000, c. 12, s. 142; 2012, c. 31, s. 43; 2017, c. 33, s. 65
- 2023, c. 26, s. 58
- 2024, c. 15, s. 54
- 2024, c. 17, s. 62
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 204.2.