If a taxpayer has over-contributed by more than $2,000 above their RRSP limit in a given month the CRA can assess a penalty equal to 1% multiplied by the over-contribution amount for each month until the over-contribution is taken care of. If you find yourself in this situation it is possible to contact your investment advisor and have the over-contributed amount withdrawn without having to include the withdrawal in your income. However, this requires filling out special forms and calculating and paying the penalty. The best thing to do is to work with your accountant and financial advisor to ensure you do not find yourself in this position.
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