RRSP Question - contribution room carried forward?

[SFA]

So I tried searching a couple of threads and websites regarding RRSPs and the unused contribution room which you can carry forward indefinitley, only to be confused even more! I plan on calling the CRA agent sometime this week but I was hoping to get this cleared up sooner. Here is my question or situation.

I've been earning income and filing tax returns since 2000, but I have never contributed to an RRSP until 2001 in which I had:

RRSP deduction limit for 2001 - $2530
RRSP contibution made - $4400
Therefore, I had unused RRSP contributions available for 2002 of $1870, as confirmed on my 2001 Notice of Assessment.


Now this makes sense to me. But since 2001 I haven't made any RRSP contributions, but how come in my 2005 notice of assessment it still only shows that I have $1870 of unused RRSP contributions? What about the periods between 2002 and 2005 where I had RRSP deductions limits, but I did NOT contribute? For example, say my RRSP deduction limits were the following between 2002 and 2005:

2002 - $2000
2003 - $3000
2004 - $4000
2005 - $4000

Shouldn't I then have $14,870 (1870+2000+3000+4000+4000) of unused RRSP contributions, and how come it isn't shown on my notice of assessment?

[USP]

I think you might be confusing "unused contributions" with "deduction limits". Your deduction limit increases every year (assuming you haven't contributed since 2001) because you've been earning income but not contributing/deducting any RRSP amounts.

Your unused RRSP contributions are exactly that - the amount of actual $ in RRSP contributions that you've made, but haven't yet deducted on your tax returns. You contributed $4400 in 2001 and deducted the maximum amount allowed ($2530) on your tax return that year. That left you with $1870 in unused contributions, which you carried forward and are now entitled to either deduct in the current tax year or carry forward again to a future year. This amount will not ever increase unless you make additional contributions to your RRSP's.

[SFA]

I think you might be confusing "unused contributions" with "deduction limits". Your deduction limit increases every year (assuming you haven't contributed since 2001) because you've been earning income but not contributing/deducting any RRSP amounts.

Your unused RRSP contributions are exactly that - the amount of actual $ in RRSP contributions that you've made, but haven't yet deducted on your tax returns. You contributed $4400 in 2001 and deducted the maximum amount allowed ($2530) on your tax return that year. That left you with $1870 in unused contributions, which you carried forward and are now entitled to either deduct in the current tax year or carry forward again to a future year. This amount will not ever increase unless you make additional contributions to your RRSP's.

That totally makese sense now after having looked at what my RRSP deduction limit every year (which has been growing, as per your explanation) and the unused RRSP contributions figure.

Thanks for clearing it up!

[USP]

No problem, glad I could help. RRSP's (and tax rules in general) can be confusing at times, especially if you're just getting into them.

On a side note, unless you anticipate earning significantly more income (bumping you to a higher top tax rate) in the next year or two, I'd suggest using that $1870 unused contribution on your next tax return and getting some money back for it. If you continue to carry it over, it'll be worth less and less over the years due to inflation. ;)