Principal Issues: [TaxInterpretations translation] A taxpayer signs a cheque on March 1 and deposits it in the mail the same day to the taxpayer’s advisor. The financial advisor does not purchase an investment in the client's RRSP until March 15. Did the RRSP contribution take place in the first 60 days of the year?
Position: No. A premium has been paid on time if, on the deadline date, the RRSP issuer has a cheque for an RRSP contribution on hand and the date of that cheque is no later than the deadline date. Unless there is abuse, the date of deposit to the RRSP account will not be a factor.
Reasons: 1999 RRSP Consultation Session; RRSP Contributions.
XXXXXXXXXX 2010-036343 Catherine Ayotte, Notary, M.Fisc. December 7, 2010
Dear Madam,
Subject: RRSP contribution deadline
Please note that, unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
It appears to us that the situation described in your letter could constitute an actual situation involving taxpayers. As stated in Information Circular 70-6R5, it is not the practice of the Directorate to comment on proposed transactions involving specific taxpayers otherwise than through advance income tax rulings. If your situation involves a specific taxpayer and one or more transactions, you should submit all relevant facts and documents to the appropriate Tax Services Office for their opinion. However, we can offer the following general comments that may be helpful to you.
Subject to certain limits, a taxpayer who pays a premium to an RRSP in a calendar year or on or before the 60th day after the end of that year may deduct, in computing income for that year, the premiums paid to the RRSP, provided that the taxpayer or the taxpayer's spouse is the annuitant under the RRSP.
In general, we consider a premium to have been paid on or before the 60th day after the end of the calendar year if the RRSP issuer received a cheque for an RRSP contribution on or before the 60th day, and the date of the cheque is also on or before the 60th day. In the absence of abuse, the date of deposit to the RRSP account will not be a factor that we will consider.
Consequently, in the situation presented, we are of the view that the contribution was not made within the first 60 days of the calendar year.
We hope that our comments are of assistance.
Best regards,
Louise J. Roy
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.