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The total amount transferred to the RRSP cannot exceed the severance or retiring allowance received. Years of part time employment also qualify as years of service. Even if only one day is worked in the year this qualifies as a year of service. If the severance or retiring allowance is not transferred directly into an RRSP, the qualifying amount can still be contributed to the RRSP in order to be allowed as a deduction on the tax return for the year it was received. To qualify, the contribution must be made within 60 days of the end of the calendar year in which it was received. Tax Tip: Defer tax by transferring your severance or retiring allowance to an RRSP.
Revised: August 30, 2011
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