4.10 Income Tax Requirements |
|---|
Member Contributions Are Tax-Deductible
Employee required contributions are fully tax-deductible in respect of the year in which the contributions are remitted to HOOPP, within the limits imposed by the ITA.
...
In accordance with the ITA, in order for a member's regular RCA contributions to be deductible they cannot exceed those made by the employer on their behalf in a given tax year. Further, the Canada Revenue Agency (CRA) considers monies used to complete an RCA buyback as a contribution by the
member. Therefore if a member completes an RCA-related buyback, the transaction may render their regular RCA contributions ineligible for a tax deduction in the year of purchase. When this occurs the member's RCA contributions should not be reported on their T4. Please contact HOOPP if you have any questions.
When you issue T4s to members who contribute to the RCA, the member's total required contributions for the current year should be reported in Box 20, Registered Pension Plan Contribution. The member’s pension adjustment should be reported in Box 52, Pension Adjustment. You are required to issue the
employee a contribution notice that provides the amount of RCA contributions. The RCA Notice Report produces these notices, along with details on the split between RPP and RCA contributions, for distribution to members who make RCA contributions. This report is available on HOOPP Insight. This
report should be run after the MDC member data has been submitted to HOOPP.
...