Spousal RRSP Withdrawals and Attribution
One spouse can make contributions to their spouse’s RRSP, and such contributions are eligible based on the contributing spouse’s RRSP deduction limit for the year. Where eligible, the contribution amount is deducted in the contributor’s tax return for the appropriate tax year.
Where a taxpayer makes a spousal RRPS contribution, for example in either of 2013, 2014, or 2015, and the spouse withdraws that amount from their RRSP in 2015 prior to maturity, the spousal RRSP attribution rules will apply (regardless of the year the deduction was taken). The effect of these rules is that the withdrawal is included in contributor’s income rather than the withdrawing spouse’s income, and no income splitting is possible. The rules were design to prevent abusive uses of RRSPs.
The amount attributed back to taxpayer is the lesser of:
- The amount contributed to the spouse’s RRSP in 2013, 2014 and 2015; and
- The amount withdrawn from the spouse’s RRSP in 2015.
Disclaimer: Articles are for general information only and do not constitute tax advice. They cannot be relied upon.
Sam Faris is a Toronto-based Chartered Professional Accountant who practices as an independent consultant on high-level Canadian tax matters and handling disputes with CRA.He also published an article recently in the business magazine: HERE.