Personal contributions are deductible within Canada Customs and Revenue Agency (CRA) guidelines. In each tax year, the allowable deduction for SPP contributions is the least of:

• $600;
• your or your spouse's RRSP deduction limit minus RRSP contributions deducted that year; or
• the amount contributed to SPP during the plan year.

You must have income from wages or a business in order to claim your SPP contribution as a tax deduction. SPP contributions in excess of the limits outlined, while not deductible, can be left in your SPP account and will not be subject to any penalty by CRA.

Contributions made during the first 60 days of the year can be deducted from either the previous or current year's income. Contributions made after the first 60 days of the year can only be deducted in the year in which they were made. Both your application and your contribution must be received by SPP before a tax receipt will be issued. You may claim your SPP contribution on line 209 of your income tax form.

If you name your spouse as beneficiary, death benefits from your account can be transferred directly to your spouse's SPP account or to an RRSP, RRIF, or guaranteed life annuity.

All payments from SPP are taxable in the year received and are not eligible for the $2,000 pension income credit. Each year you will receive a T4A for the benefits that you have received in that year.

Key Benefits

• Personal tax deduction may be available
• Spousal tax deduction may be available
• Earnings are sheltered from tax until received as income