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Tax Time - do you know your contribution limits?

Planning your 2021 RRSP contributions

The RRSP deduction limit for the 2021 tax year is 18 per cent of pretax earned income or $27,830, whichever is less. For example, if you earned $90,000 in 2021, your RRSP deduction limit is 18% ´ $90,000 = $16,200. However, your Alberta Teachers’ Retirement Fund pension contributions reduce the amount you can contribute to a Registered Retirement Savings Plan (RRSP). Those amounts are recorded in box 52 on your T4 from your employer. This amount is then reported on line 206 of the Income Tax T1 General.

Pension adjustments

Pension adjustments (PA) reflect the value of contributions to your Alberta Teachers’ Retirement Fund. These earned amounts take up RRSP room.

The tax formula used to determine the benefit is (9 ´ yearly benefit) - $600.

Let’s look at an example of a teacher who earns $90,000. The yearly maximum pensionable earnings (YMPE) for 2021 is $61,600.

$61,600 ´ 1.4% = $862.40

$90,000 - $61,600 = $28,400 ´ 2.0% = $568.00

Yearly benefit is $1,430.40 (862.40 plus 568.00)

PA = (9 ´ $1,430.40) - $600 = $12,273.60

 

RRSP room

 18% of $90,000 = $16,200

$16,200 – $12273.60 = $3,926.40

***If you have both a regular RRSP and a spousal RRSP, the deduction limit is the maximum amount you can contribute to all your RRSP accounts combined.

RRSP deduction limit vs contribution limit

The RRSP deduction limit differs from the contribution limit as it does not consider past unused RRSP contributions. The RRSP contribution limit reflects your current year maximum contribution, plus any unused contribution room from previous years. Your contribution limit is the total of this year’s deduction limit and any unused contribution room.

How to find your RRSP contribution limit

The Canada Revenue Agency (CRA) tracks individual contribution limits and reports this on the individual’s Notice of Assessment each year under the heading “Available Contribution Limit.” If you set up an account with CRA, you can also check your RRSP contribution limit online. Additionally, you can also access the status of your refund, check for benefit amounts, see previous years’ tax information and notices of assessment and make payments to your tax account.

Where to report RRSP contributions

You are required to report all RRSP contributions on line 208 of your T1 General Income Tax Return. Contributions made from March to December in each year are reported in the calendar year they are made. Contributions for the first 60 days of the next year can be reported in either calendar year. Your financial institution will provide you with RRSP receipts.

 

Financial Wellness Sessions

There are two sessions planned for Saturday, April 10 and Saturday, May 8, 2021, both beginning at 10 AM.

Links to register for one of these sessions are as follows:

April 10th: https://www.eventbrite.ca/e/financial-wellness-101-with-capital-estate-planning-and-mnp-debt-tickets-145113573605

May 8th: https://www.eventbrite.ca/e/financial-wellness-101-with-capital-estate-planning-and-mnp-debt-tickets-140149353489

 

The two-hour Financial Wellness 101 session presented by Capital Estate Planning and the MNP Debt Group is built to give you tools to take control of your financial situation:

·    How to start saving and investing.

·    Easy steps on where and when to put your money.

·    Tips for budgeting and saving.

·    The importance of an emergency fund.

·    Tips for maintaining a good credit score.

·    How to handle debt and how to address it.

·    Tools you can access if things get out of control.

 

A Zoom link to your session will be sent out to all registrants closer to the date of the session.

Secondment Opportunities

Teachers are eligible to apply for secondment opportunities with Alberta Education. Many opportunities exist and teachers are encouraged to apply. click here for information

WEBINAR OPPORTUNITY

ATRF now hosts virtual webinars as well. The first Steps to Retirement pension webinar is on March 13, with more to come.

 Any teacher that is interested in joining a presentation can register by signing in to MyPension.

A Teacher’s Right to Representation

Section 148(1)(a) (ii) of the Alberta Labour Relations Code (the code) protects the rights of teachers to be represented by the Association when facing discipline by their employer. The code also stipulates that no employer or their designate can deny or interfere with this representation.

How Teacher Employment Services Can Help

  • Provide consultation about professional relations matters and advice as to their resolution.
  • Give general and legal advice and assistance where necessary with respect to matters arising from the member’s duties as a teacher. This includes, in most cases, the provision of the services of an Association solicitor, without charge, to represent a teacher in a lawsuit or criminal allegation arising out of the teacher’s duties.
  • Assist and advise teachers in cases of termination of contract or designation and provide representation, in most instances by an Association solicitor, in a Board of Reference appeal.
  • Offer advice and assistance to teachers who have been asked to resign from their positions. Such advice should always be requested before a teacher submits a resignation. Some teachers believe that they must submit their resignations if they are asked to do so. This is not true.
  • Provide advice and assistance and, if necessary in later stages, legal counsel for members facing charges under the Practice Review Bylaws of the Alberta Teachers’ Association.

 

Teachers must understand their right to representation. If you have any concern about a meeting you have been asked to attend, always ask directly if it is a disciplinary meeting before attending. If you are being asked to attend a disciplinary meeting, call 1-800-232-7208 and ask to speak with Teacher Employment Services.