5-911334
Re: RRSP Contributions
We are writing in reply to your letter of May 6, 1991, in which you ask whether you can claim a 1990 contribution to an RPP against your 1991 income if the contribution is withdrawn and contributed to an RRSP.
A contribution to an RRSP in the year or within 60 days of the year end can be deducted from income for that year to the extent provided by the Income Tax Act (the "Act"). The RRSP deduction limit is described in paragraph 146(1)(g.1) of the Act and, as mentioned in our letter of May 3, 1991, for 1991 you may deduct the lesser of:
1. 18% of 1990 earned income minus your 1990 pension adjustment(PA); and
2. $11,500.
We are unable to confirm whether the amount you withdrew from your pension plan will be fully deductible from your 1991 income if it is contributed to an RRSP in 1991. You will have to determine this given the limits on RRSP contributions described above as it relates to your particular fact situation, namely the amount of your 1990 PA and earned income. Questions concerning your PA should be addressed to your employer. You may find the commentary in Chapter 5 of the enclosed Pension and RRSP Tax Guide helpful in its discussion of the 1991 deduction limits. "Earned income" is a term defined in the Act and is discussed at pages 20 and 21 of the Guide.
We hope the foregoing answers your question satisfactorily.
Yours truly
for DirectorFinancial Industries DivisionRulings Directorate