Your contribution reduces your RRSP deduction limit.

If you have not contributed into your RRSP to the maximum allowed, the remained room is carried to the next year. If you have contributed but have not deducted on line 208 or 20800, it called unused contributions. If you have unused contributions, you must complete Schedule 7 and send it to CRA. You can either leave the unused contributions in the plan or withdraw them. Regardless of the option you pick, if you have over contributed, you will be taxed on the unused amount over the limit. If you make a withdrawal, you have to include the amount in your income and deduct as withdrawal contribution.

If you contributed more than what you should have into your RRSP, in any given period, you will have excess contributions. You will have to pay 1% tax per month on any excess contribution over $2,000 until the excess is withdrawn or fully utilized in the following year provided the available room in the following year absorbs the excess. You will not be charged 1% tax if the excess is withdrawn before the end of the month in which the contribution is made or if the excess is transferred to a group plan.

If you have excess contribution and you have to pay 1% tax on excess, you must complete T1-OVP and send it to CRA along with RRSP transaction detail statement confirming the dates of contribution and withdrawals. The excess tax can cause penalties and interest if not paid on time which is 90 days after the end of the calendar year.

CRA may waive the tax upon receiving the request from the tax payer on form RC2503 if the two conditions are met. First condition is that the excess was made due a to reasonable error and second condition is that the taxpayer has taken a reasonable step to eliminate the excess contribution.

If you have contributed to an RRSP plan, you should receive a receipt with your name as a contributor and the amounts of the contributions. You don’t need to submit this receipt to CRA unless you are asked by CRA to submit them. The contribution amounts are included on line 20800 (Previously 208).