I am getting an error stating "RRSP - Non-refundable credits exceed tax; consider reducing the RRSP deduction." I have reduced line D < 2018 limit and it's still there.

Contributions in the year - 9800

Deduction limit - 7603

I've reduced my deduction to 600 and then the error goes away, otherwise it stays.

Answer

This notification is warning you that you do not need to deduct the RRSP contributions as they will not reduce your federal or provincial taxes.  It is better to save the RRSP contributions unused for future years.

If you look at line 420 before you change the RRSP contribution I believe it would be zero.  After you reduce it to 600 (or below) I would guess it would change line 420 to show tax owing.  You should find the sweet spot for which you would not 'waste' your RRSP contributions (looking at lines 420 and 428).

All of the above being said, it does sound like there is an over contribution on the RRSPs and you should look into filling out form T1OVP.  If the numbers mentioned in your question are correct, you have over contributed to your RRSPs.  You are allowed to go over your RRSP limit by up to $2,000, but 9,800 - 7,603 = 2,197 which is over this allowable limit.

Hope this helps

Was this answer helpful? Yes No

No answers have been posted

More Actions

People come to ProFile for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: