DPSP and how to report on income tax

[arcticcat522]

Hey everyone,

My employer has set up a DPSP (deferred profit sharing plan) that I'm apart of. For the past few years I didn't think anything about it, but I'm curious how is it reported to the CRA? Do I need to include it on my tax return somewhere?

The way my company works, is the match up to a certain percentage of my gross income (to a max of 2%). I know the portion I add is into an RRSP, and is reported, but what about the portion they match into the dpsp. I can't report it as RRSP, but it needs to be reported since it decreases my RRSP room.

I have been filing my taxes with Simpletax and don't see any options for it. Reading online, it looks like the employer needs to do something when they submit everything, but does that take care of making sure my RRSP room is adjusted accordingly?

Anyone clear this up for me?

[suntan]

It should just decrease your RRSP room. There's nothing you need to do.

[ExtraSlow]

it shows up on your T4, doesn't it, like as a separate line the same way a pension does. I think.

[skandalouz_08]

It should show up on your T4 as well as your paystubs would show it as a taxable benefit.

[arcticcat522]

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It should just decrease your RRSP room. There's nothing you need to do.

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it shows up on your T4, doesn't it, like as a separate line the same way a pension does. I think.

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It should show up on your T4 as well as your paystubs would show it as a taxable benefit.

CRA keeps track of contribution room, just want to be sure this is taken into account.

I don't see it on my T4, but I feel it should be there.

I have it on my pay stubs, so I know the numbers, just want to be sure my contribution room is updated correctly on the cra side. It's not a taxable benefit.

I'm going to call payroll and see if they know anything.

[arcticcat522]

Looks like it should be added to my T4 as a pension adjustment (PA). Don't see it on the T4 anywhere. I'm assuming it would be pretty clear. Anyone know or have a PA on their T4 v

[sabad66]

Is it an RRSP match or a pension match? They are different things.

You won't see a Pension Adjustment if it's not a Pension.

I'm more familiar with Pension and not RRSP match, but my guess is RRSP match would either be on the T4 as a taxable benefit, or not show up at all.

Edit: actually scratch what I said above, I am reading that you should see a PA amount for the company contributions

[arcticcat522]

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Is it an RRSP match or a pension match? They are different things.

You won't see a Pension Adjustment if it's not a Pension.

I'm more familiar with Pension and not RRSP match, but my guess is RRSP match would either be on the T4 as a taxable benefit, or not show up at all.

It's an RRSP match. I claim the RRSP match that is deducted off my pay, the company deposits into the DPSP so they get a tax savings. I don't think it's a taxable benefit for me, everything I've read says it's tax deferred for the employee. Taxed when it is withdrawn. If it was a taxa ble benefit, wouldnt I be required to pay tax on it now?

If it didn't show up at all how is everything reconciled with regards to contribution room?

[sabad66]

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It's an RRSP match. I claim the RRSP match that is deducted off my pay, the company deposits into the DPSP so they get a tax savings. I don't think it's a taxable benefit for me, everything I've read says it's tax deferred for the employee. Taxed when it is withdrawn. If it was a taxa ble benefit, wouldnt I be required to pay tax on it now?

I agree with your logic, so in that case I don’t think you will see it as a taxable benefit.

On your t4 it doesn’t show anything on line 52?

[arcticcat522]

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I agree with your logic, so in that case I don’t think you will see it as a taxable benefit.

On your t4 it doesn’t show anything on line 52?

Nope. Nothing. Can't get hold of payroll yet either

[arcticcat522]

Found this on a web site. retirehappy.ca

"DPSP contributions are added to the T4 as a Pension Adjustment (PA). The pension adjustment decreases the employees RRSP contribution room."

If that's how it should be, I'm assuming CRA keeps track and will update my RRSP limit using that info.

[skandalouz_08]

I think I misunderstood. Pension (aka DPSP) matching isn't taxable but matching contributions to a Group RRSP would be taxable to you. Found this with a simple google search:

Your employer’s contributions to a registered pension plan on your behalf are not taxable. However, when your employer contributes to or matches your group RRSP contributions, this amount is viewed as taxable earnings that increase your income.

Source: https://www.sunlife.ca/ca/Tools+and+...gnLocale=en_CA

[arcticcat522]

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I think I misunderstood. Pension (aka DPSP) matching isn't taxable but matching contributions to a Group RRSP would be taxable to you. Found this with a simple google search:

Your employer’s contributions to a registered pension plan on your behalf are not taxable. However, when your employer contributes to or matches your group RRSP contributions, this amount is viewed as taxable earnings that increase your income.

Source: https://www.sunlife.ca/ca/Tools+and+...gnLocale=en_CA

Gotcha. They don't contribute to my group RRSP. They match what I deposit into a group RRSP, into the DPSP. It's different.

[arcticcat522]

Soooo, got hold someone at payroll and asked.....They have been fucking it up since day 1. (8+ years) She has apparently been looking into what to do for a couple weeks. I was told, T4's will be sent out later than usual this year because they have to figure out how to do it correctly. Good thing is it looks like they have been taking the correct tax, CPP, EI.

Since they f'ed up on that.... I should ask this to everyone. I was told the DPSP amount is used to calculate CPP and EI deductions, but not tax. That sound right? I think it makes sense since they are based off gross pay?