Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit
The maximum amount that the Canada Revenue Agency (CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liability. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be imposed on the coverage.
Investopedia Commentary
In order to arrive at this contribution limit, the CRA calculates the taxpayer's maximum contribution earned for the year according to his or her annual income. It then deduct transfers of certain qualifying income made to the taxpayer's RRSP throughout the year. Finally, the CRA calculates for pension adjustments using past service pension adjustments and adds back pension adjustment reversals and carries forward any unused RRSP deductions that were not used in previous years.
Deduction limits are shown on your personal Notice of Assessment.
Related Links
Tax Tips For The Individual Investor
See also: Canada Revenue Agency, Deduction Limit, Notice of Assessment, Registered Pension Plan - RPP, Registered Retirement Income Fund - RRIF, Registered Retirement Savings Plan - RRSP, Withholding Tax