An RRSP overcontribution cannot be diagnosed from the account's market value. Investment growth is not a new contribution. Start with deposits, available room and previously unused contributions.
A workplace plan and a personal RRSP can each accept payments without knowing what went into the other. Combine their records before deciding whether there is an excess.
Build a monthly history
Gather the latest deduction-limit statement, contribution receipts and transaction statements showing actual dates. Include contributions you made to a spouse's RRSP and relevant group-plan amounts.
The receipt may group the first 60 days together. For excess-contribution calculations, January and February can matter separately. Keep the actual deposit confirmations rather than trying to infer dates from the annual receipt.
Understand the $2,000 amount
The usual $2,000 cushion is part of the excess-tax calculation. It is not additional deductible RRSP room. You must have turned 18 in an earlier calendar year to qualify: for a 2026 calculation, that means 2025 or earlier. Turning 18 during 2026 does not yet qualify you for this amount.
Generally, unused contributions exceeding the deduction limit by more than $2,000 attract a 1% monthly tax, subject to the applicable exceptions. For example, if unused contributions are $3,500 above the deduction limit and the cushion applies, the potentially taxable excess is $1,500. That would mean $15 for each month-end when that excess remains, assuming no other adjustments.
Check what remains at month-end
The RRSP calculation looks at the excess at the end of each month. A qualifying corrective withdrawal before month-end can prevent that month's excess tax. This differs from the TFSA rule, which uses the highest excess during the month even if it is removed before the month ends.
Stop unintended automatic deposits and confirm when a withdrawal actually leaves the plan. A request sent to the bank on the last day is not proof that it was processed that day. Special rules can apply to qualifying group-plan amounts; keep the employer's plan documents with the transaction history.
Choose how to withdraw unused contributions
An ordinary cash withdrawal is not automatically a tax-neutral reversal. Before proceeding, check that the contributions were never deducted and that the timing and other conditions for an offsetting deduction are met. CRA's unused-contribution rules distinguish two routes:
- Request a withholding waiver first. Form T3012A lets you ask the CRA to approve a refund of eligible unused contributions without tax being withheld. Obtain approval before the institution makes that withdrawal. The withdrawal still has to be reported, with the corresponding deduction where allowed.
- Withdraw with withholding. The institution withholds tax. Report the withdrawal and the tax withheld on your return, and use Form T746 to calculate the eligible offsetting deduction. The withholding is a tax credit on the return, not a separate penalty or a promise that the full amount will be refunded.
The timing matters: if the excess stays in the plan through another month-end while you wait for T3012A approval, another month's excess tax can arise. Compare that consequence with the temporary cash cost of withholding. Neither route removes tax already owing for earlier months.
File the excess-tax return separately
Where tax is payable, the T1-OVP filing and payment deadline is generally 90 days after year-end. For a 2026 excess, that is March 31, 2027, not the ordinary personal-return deadline. Use the applicable year's return and include statements showing the actual contribution and withdrawal months.
If the excess arose from a reasonable error and you are taking reasonable steps to eliminate it, Form RC2503 is the separate request to waive or cancel the excess-contribution tax. Explain the mistake and corrective steps, attach the supporting evidence to the request and keep copies. Relief is not automatic.
Keep the correction confirmation with the calculation. That record will also help reconcile the next assessment.
