RSP overcontribution

[moebius]

So, I've contributed my limit for 2008 in January. Now in February they announce the company pension plan where they match your contributions up to 5% of the annual salary. This sucks since I've already contributed. I know I can make overcontribution of $2000 a lifetime without penalties. How can I use the company contribution this year - since it's free money basically. What is the penalty of overcontribution and how much do you lose - I have to see if I overcontribute by $10000 ($5000 mine and $5000 company's) if I still get more company's money than if I were to contribute only $2000 ($1000 mine and $1000 company's). With overcontribution can I make a contribution and then take it out without penalties - for example the same day? Not sure what works in my situation - have also asked the company's accounting to see what they say.

[ber0]

So, I've contributed my limit for 2008 in January. Now in February they announce the company pension plan where they match your contributions up to 5% of the annual salary. This sucks since I've already contributed. I know I can make overcontribution of $2000 a lifetime without penalties. How can I use the company contribution this year - since it's free money basically. What is the penalty of overcontribution and how much do you lose - I have to see if I overcontribute by $10000 ($5000 mine and $5000 company's) if I still get more company's money than if I were to contribute only $2000 ($1000 mine and $1000 company's). With overcontribution can I make a contribution and then take it out without penalties - for example the same day? Not sure what works in my situation - have also asked the company's accounting to see what they say.

since you mentionned that the contribution came in the first 2 months of 2008, you have the option to just claim what you can (not to pay fees on) and declare the rest in ur 2008 income tax return.

[TopTaxGuy]

Take the company pension.

Claim your contribution in January 2008 next year. Any contributions made between January 1, 2008 and February 29, 2008 can be claimed either on the 2007 tax return or the 2008.

If you are still over your contribution limit you can withdraw the excess amount.

See the CRA's site Contributing to an RRSP (http://www.cra-arc.gc.ca/tax/individuals/topics/rrsp/contributing/menu-e.html).

It shoul.d address your concerns. You can also look at the information on RRSP contributions (http://www.taxresource.ca/personaltax/rrsp_contributions.html) and RRSP deductions (http://www.taxresource.ca/personaltax/rrsp_unusedcontrib.html).