What Contribution Rules Apply to Spousal RRSPs?


Quick Answer

Some contribution rules that apply to spousal registered retirement savings plans include stipulations that the contribution limit is indicated on the notice of assessment, a spouse's contribution limit has no effect on a spousal RRSP and a person may contribute either to his RRSP, his spouse's or both. An RRSP is registered in the spouse's name and he controls it, according to Intuit.ca.

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Full Answer

Individuals who contribute to a spousal RRSP get to deduct the investment amounts from their taxes. Spouses can contribute to their spouse's RRSP until year's end the year the spouse turns 71, notes Intuit.ca.

When a spouse retires, the RRSP gets converted into an annuity or registered retirement income fund, and the income is taxed at her tax rate in her name. However, if a spouse withdraws any of the funds within three calendar years of the other person's contribution, the amount is added to the contributor's taxable income the same year as the withdrawal.

The exceptions to the tax addition are that people in post-secondary education or those who are buying a home may take money out of a spousal RRSP. The spouse must repay the funds, but no penalty is assessed if the repayments are made as directed. If both of the spouses' RRSPs are used for the Home Buyers' Plan, it doubles the normal maximum withdrawal of $25,000 as of 2015.

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