I get a LOT of questions about how to report RRSP contributions, RRSP deductions, transfers to the HBP or LLP, and transfers from an RPP on the income tax return.
Many of these amounts must first be reported Schedule 7 – RRSP, Unused Contributions, Transfers and HBP or LLP Activities. This guide should help you understand how schedule 7 works and how it reports your RRSP activities on your tax return. The document is fairly straight forward and there are five parts to the document.
Five Parts of Schedule 7
There are five parts to schedule 7 that are used to report your contributions, repayments under the HBP or LLP, RRSP deductions, and carry forward amounts. These five parts report the following:
1. Contributions: This is where you calculate unused deductions from a previous year, plus contributions to your RRSP in the last 305 days of the prior year, plus how much you contributed in the first 60 days of this year.
This reports the total amount of RRSP you could deduct before repayments to the LLP or HBP are taken into account.
2. Repayments To The HBP or LLP: You may designate any or all of your RRSP contributions as repayments to your HBP or LLP balance. If you are required to make repayments under these programs but do not enter an amount here, your repayment will be added to your taxable income on your Notice of Assessment.
3. RRSP Deductions: So far Schedule 7 has helped you calculate the amount of RRSP contributions you have made that are available as a tax deduction. You are not required to take an RRSP tax deduction and can carry forward any amount you do not claim.
If you decide to take a tax deduction, or have transferred amounts from a foreign pension plan or received a retirement allowance, you report them on line 11.
4. Carry Forward Amount: If you didn’t use all of your RRSP contributions as a deduction, you will have an amount on Line 14 of schedule 7. This amount can be used in future years.
5. If you made a withdrawal under the HBP or LLP, you report them in Part E of Schedule 7.
Share Your Schedule 7 Experience
Have you completed Schedule 7 recently for your RRSP’s? Did you have a retiring allowance or pension transfer? Did you enter the HBP or LLP and are reporting participation or repayments?