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T4RSP – RRSP Withdrawals 

Learn how the T4RSP reports RRSP withdrawals and how Optimize helps you manage the tax impact in your retirement plan

Withdrawals from your Registered Retirement Savings Plan (RRSP) must be reported as income. That is where the T4RSP Statement of RRSP Income comes in. It shows how much you withdrew and any tax that was withheld, whether the funds were used for retirement, short-term needs, or a program like the Home Buyers’ Plan.

At Optimize, we include your T4RSP as part of your overall financial plan. Understanding this form helps you manage income timing, contributions, and withdrawals more effectively, avoid surprises, and stay aligned with your retirement goals.

The Foundation of RRSP Income Reporting

The T4RSP form is issued when you withdraw money from an RRSP. Unlike RRIFs, which are structured for consistent retirement income, RRSPs are typically used for saving and accumulating. However, any time you take money out — whether for living expenses, a major purchase, or early retirement — it becomes taxable income.

Your T4RSP shows:

  • Total amount withdrawn from the RRSP during the year.

  • Amount of tax withheld at source (if applicable).

  • Program-specific codes, such as Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP), if relevant.

This form must be included with your personal tax return (T1), and the income is taxed at your marginal rate, unless part of a qualifying program that is being repaid over time.

Tip: RRSP withdrawals are not like TFSA withdrawals — they are taxable and cannot be re-contributed unless you have new contribution room. It is important to review this with us before taking money out.

Why the T4RSP Matters in Your Financial Plan

RRSP withdrawals are not just financial transactions — they are income events. That means they can affect your taxes, your eligibility for benefits, and your long-term retirement security. This matters when you are:

  • Transitioning into semi-retirement and drawing occasional income.

  • Using RRSP funds for a down payment through the Home Buyers’ Plan.

  • Accessing funds for education through the Lifelong Learning Plan.

  • Taking emergency withdrawals or bridging a gap before starting a pension.

Learn how to read a T4RSP form to better understand the details and terminology used throughout your return.

Depending on the timing and amount, RRSP withdrawals can bump you into a higher tax bracket or trigger clawbacks on government benefits like Old Age Security. That is why we pay close attention to when and how these withdrawals happen.

Important: If you make RRSP withdrawals for programs like HBP or LLP, you must follow the repayment schedule or risk having the unpaid balance added to your taxable income in future years. We can help track and manage these timelines for you.

Learn How to Read a T4RSP

Your T4RSP shows how RRSP withdrawals affect your taxes, benefits, and long-term goals. Whether for retirement, a major expense, or repaying a Home Buyers’ Plan, reading it correctly helps keep your plan on track.

At Optimize, we use the T4RSP to support tax-smart decisions. This article explains the key sections so you can file confidently and plan effectively.

Identification and Basic Information

This section provides CRA with key information to link the withdrawal to your account and confirm the type of plan.

Issuer’s name and address
Identifies the financial institution or provider who issued the RRSP withdrawal.

Recipient’s name and address
Links the withdrawal to you personally, so CRA can match it with your return.

Plan number
Used to distinguish which RRSP the funds came from, especially if you hold more than one.

Tax year
Indicates the year in which the withdrawal occurred and must be reported.

Withdrawal Amounts

This section outlines how much you withdrew and the nature of those withdrawals. All withdrawals from RRSPs are taxable unless part of a repayment to specific government programs.

  • Box 16 – RRSP income
    The total amount you withdrew from your RRSP during the year. This is fully taxable and must be included on Line 12900 of your return.

  • Box 20 – Income tax deducted
    The amount of tax withheld at source by the financial institution. This is not necessarily enough to cover the tax owing, especially for large withdrawals.

  • Box 24 – Excess amount
    Withdrawals that may be considered over-contributions. These can result in penalties if not corrected.

  • Box 27 – Refund of premiums to spouse or common-law partner
    Applies in estate situations where RRSP proceeds were transferred to a surviving spouse.

Important: RRSP withdrawals are added to your income and taxed at your marginal rate. If you withdraw a large amount in one year, it could push you into a higher tax bracket — even if withholding tax was already applied.

Special Program Repayments

If you participated in the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP), RRSP repayments and defaults are reported on your T4RSP.

  • Box 25 – HBP repayment
    Shows if you returned funds to your RRSP as part of your Home Buyers’ Plan repayment schedule.

  • Box 26 – LLP repayment
    Indicates any amounts returned under the Lifelong Learning Plan.

  • Box 30 – HBP amount not repaid
    If you missed an HBP repayment, the required amount is added to your income and taxed.

  • Box 32 – LLP amount not repaid
    Same as above, but for the Lifelong Learning Plan. Missed repayments become taxable income.

Tip: If you’re planning to withdraw from your RRSP for short-term needs, talk to Optimize first. There may be more tax-efficient strategies available — or we may recommend spreading withdrawals over multiple years to manage tax brackets.