As part of Canada’s COVID-19 Economic Response Plan, changes were made to provide support to seniors; this withdrawal reduction is one of those measures.
What is a Registered Retirement Income Fund (RRIF)?
A registered arrangement that was made between an individual and a carrier (like a bank or insurance company), where the carrier makes payments to you, after you transfer property to that carrier.
There is a minimum amount that must be paid out to the individual each year, that is based on our age, each year; the RRIF will be paid out for your life, and once it is started, no other amounts can be added into. You can have more than one RRIF.
Amounts paid out of a RRIF are taxable.
What is the RRIF Withdrawal Reduction?
Part of the new measures put forth by the federal government includes a reduction in the withdrawal minimum to assist seniors currently receiving payments
- Minimum withdrawal for 2020 is reduced by 25%
- The 25% reduction is only applicable for 2020
For more details on income support and other benefits as part of the Federal Government’s Economic Response Plan for COVID-19, click here.
See also our COVID-19: Tax Info Centre, from our TurboTax Support team, answering many FAQs on this topic and more.
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Susan has been an accounting professional for over 20 years, and has been working with businesses and individuals and their taxes for the past 12. Education is a passion for Susan, and when not writing or talking about tax for TurboTax Canada, she can be found speaking at events, teaching at Mohawk College, and working with many businesses and entrepreneurs through her own accounting advisory practice. Susan is known to be approachable but pulls no punches when it comes to the reality of business finance and taxes.