Canadians with registered savings and retirement plans may have reasons to move their registered plans from one issuer to another.
Generally, if you withdraw the funds from a registered plan, fully or partially, with the intent to move it to another registered plan, you may get hit with substantial tax charges.
To avoid these charges, you will need to carry out some qualifying transfers by using the T2033 form.
What is the T2033?
A T2033 is a form that you can fill to make entitled transfer payments between registered plans on a tax-free basis.
You may need to fill the T2033 form to make transfers between registered plans such as the Registered Retirement Pension Plan (RRSP), the Registered Pension Plan (RPP), the Registered Retirement Income Fund (RRIF), the Deferred Profit-Sharing Plan (DPSP), the Specified Pension Plan (SPP), and the Pooled Registered Pension Plan (PRPP).
The T2033 form consists of four sections:
Section 1 contains information about the annuitant or member of the registered plan.
This includes information on first and last name, social insurance number (SIN), address, and telephone number.
Section 1 is further broken down into three parts:
- Part A: This part requires you to provide information on transfers from the registered plan such as the plan number and name, as well as the issuer, carrier, or administrator details.
- Part B: This part contains a section for a description of the amount to be transferred and indicates if the transfer will be made for all the property in the plan, part of the property in one single payment, or in several payments.
- Part C: This part identifies the registered plan or annuity that you are transferring the funds to.
Section 2 requires the transferee’s agreement on the direct transfer of payments to the registered plan.
Section 3 is a declaration by the transferor of the amount being transferred between registered plans and any spouse or common-law partner contribution information.
Section 4 shows a receipt by the transferee.
Generally, a receipt is not expected to be issued for the amount transferred.
When Do I Need to Use a T2033?
To avoid withholding taxes on transfers between registered plans, or an annuity, you may need to use a T2033 in the following instances:
- Transfer of excess amount from a registered retirement income fund (RRIF) to another registered retirement income fund, RRSP or SPP.
- Transfer of property, including money, from an unmatured Registered Retirement Savings Plan (RRSP) to another RRSP, a Registered Pension Plan (RPP), a Registered Retirement Income Fund (RRIF), or a Specified Pension Plan (SPP).
- Transfer of property, including money, from a Registered Retirement Income Fund (RRIF) to a Registered Pension Plan (RPP) or another Registered Retirement Income Fund (RRIF).
- Transfer of property from a Specified Pension Plan (SPP) to a Registered Retirement Savings Plan (RRSP), a Registered Retirement Income Fund (RRIF), or a Specified Pension Plan (SPP) or, an annuity.
When you use a T2033 form, no taxes are withheld on your transfers and you do not need a T4RSP, T4RIF, or T4A slip or receipt.
Filling the T2033 form and submitting it to the Canada Revenue Agency generally allows for excluding any qualifying payments transferred to a registered plan or amounts used to purchase an annuity from income.
Or, it could allow for a deduction to offset an income inclusion.
T2033 vs T2151: What’s The Difference?
While Form T2151, Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3 can also be used when transferring amounts from one registered account to another, or an annuity, it differs from the T2033.
The T2151 form is specifically used to make direct transfers of lump-sum amounts.
For example, If you are going through a marriage or common-law partnership breakdown and entitled to a lump-sum transfer, then you may use a T2151 for:
- Transferring a lump-sum payment from a Registered Pension Plan (RPP) to another RPP, or a Registered Retirement Savings Plan (RRSP), a Pooled Registered Pension Plan (PRPP), a Registered Retirement Income Fund (RRIF), or a Specified Pension Plan (SPP).
- Transferring a lump-sum payment from a Deferred Profit-Sharing Plan (DPSP) to a Registered Pension Plan (RPP), or a Registered Retirement Savings Plan (RRSP), a Pooled Registered Pension Plan (PRPP), a Registered Retirement Income Fund (RRIF), or a Specified Pension Plan (SPP).
Frequently Asked Questions
- How do I report an RRSP transfer on a tax return?
For transfer of property, including money, from an unmatured RRSP, you do not need a T4RSP slip or receipt. To defer taxes on an RRSP transfer to another registered plan, you may use the T2033 form.
However, if you make a full or partial commutation payment from an RRSP, then you need a T4RSP slip or a receipt. To avoid withholding taxes, you need to fill the Form T2030, Direct Transfer Under Subparagraph 60(l)(v). Your payment will be shown in box 22 of your T4RSP slip, report this amount on line 12900 of your tax return.
If the transfer is made to your RRSP, you will need to fill out and submit Schedule 7, RRSP, PRPP and SPP Unused Contributions, Transfers and HBP, or LLP Activities with your income tax return.
- Is a LIRA an RRSP?
A LIRA is a locked-in retirement account. Usually, when you leave your current employer, your money in a registered pension plan may be transferred into a LIRA. You will generally not be able to make more contributions or withdrawals to or from this account.