Your maximum RRSP deduction is based on your earned income in the previous year and unused contribution room from prior years. What is considered earned income?

Common forms of earned income include employment income, income from an unincorporated business, and rental income. Losses and expenses from these sources reduce earned income. Your earned income is increased by any taxable alimony or maintenance you receive and reduced by any deductible alimony or maintenance you pay during the year.

Earned income does not include investment income (such as capital gains, interest and dividends) or retirement income (such as RRIF income, old age security and Canada Pension Plan) except certain disability pensions.

Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.