The refund that a taxpayer receives with respect to unused contributions paid to an RRSP, PRPP or a SPP is entered in box 20 or 22 of the T4RSP slip (in the case of a RRSP), in box 24 of the T4RIF slip (in the case of a RRIF), in box 194 of the T4A slip (in the case of a PRPP) or in box 16 of the T4A slip (in the case of a SPP). This refund is included in income on line 11500 (in the case of a RRIF or a SPP), on line 12900 (in the case of a RRSP) or on line 13000 (in the case of a PRPP), but a deduction may be claimed on line 23200. In order for the taxpayer to claim this deduction, this form must be completed.
The software automatically posts the amounts entered on the T4RSP, T4RIF and T4A slips to lines 6, 7, 8 or 9, as the case may be. The section with lines 1 to 3 is multiple in order to allow you to deduct a refund of unused contributions from contributions made over several years. You must enter the taxation year in which the excess contribution was made on line 1 and complete lines 2, 3, 10 and 11, if applicable.
The deduction calculated will be claimed as another deduction on line 23200 of the T1 jacket.
This form must not be used when the contributions result from the transfer of a lump-sum payment from a registered pension plan. If applicable, you must use Form T1043, Deduction for Excess Registered Pension Plan Transfers you Withdrew from an RRSP or RRIF.
According to the information contained on Form T746:
"If we allow you to deduct from your income the unused RRSP, PRPP, and SPP contributions you or your spouse or common-law partner withdrew, we will not treat them as RRSP contributions, and you cannot deduct them for any year. When you complete your return, do not enter this amount on Schedule 7, Unused Contributions, Transfers, and HBP or LLP Activities. If, in a previous year, you included these contributions on Schedule 7, ask for an adjustment to your income tax return for that year. The adjustment will reduce your unused contributions available to carry forward to a future year. You may have to pay tax if the amount on line 4 of this form is more than $2,000. For more details, see the section called "Unused RRSP Contributions" in Chapter 2 of Guide T4040, RRSPs and Other Registered Plans for Retirement and Form T1-OVP, Individual Income Tax Return for RRSP Excess Contributions."