What Is the T2019 Form for RRSP Death Transfers in Canada?

Sometimes an RRSP or RRIF names the estate as beneficiary, or has no named beneficiary at all. The money then goes into the estate, and the tax can fall on the final return. For an RRSP paid to the estate, Form T2019 is one way a qualifying survivor can change that result.

This article explains what the form does, who signs it and what to check about timing. It is general information, so an accountant or lawyer should confirm how it applies to your estate.

This article covers Canadian federal tax law, which applies in every province.

What the form does

When the annuitant of an unmatured RRSP dies, the CRA treats the annuitant as having received, immediately before death, an amount equal to the fair market value of all property held in the RRSP, and that amount is reported on the final return. The deemed amount is shown in box 34 of a T4RSP issued for the year of death.

If an RRSP names the estate or has no designated beneficiary, the whole fair market value is the deceased's income on the final return, and the amount paid to the estate forms part of the estate that bears the tax. That amount is added to the deceased's other income for the year of death and taxed at graduated rates, with provincial or territorial tax on top.

Form T2019, Death of an RRSP Annuitant, Refund of Premiums, changes that for eligible people. A payment to the estate is a refund of premiums only if a qualifying survivor is a beneficiary of the estate and the legal representative and the survivor jointly file the form. This lets the income be taxed to the survivor instead of the final return.

The Income Tax Act supports this. Subsection 146(8.1) lets the legal representative and an individual jointly designate, in prescribed form, that a payment is a refund of premiums, and the designated amount is deemed received by that individual.

Who can be named

The person must be a qualifying survivor: the deceased's spouse or common-law partner, or a financially dependent child or grandchild. A non-dependent child or grandchild can receive amounts only as a taxable payment, not as a rollover. A financially dependent child or grandchild may roll over a refund of premiums even if the deceased left a spouse or common-law partner.

Financial dependence for a child or grandchild who is not disabled means they ordinarily resided with and depended on the annuitant, and their net income for the year before death was under the unreduced maximum basic personal amount. The limit is higher where there is a mental or physical infirmity. Non-resident dependants may qualify if they received significant financial support from the annuitant, but a written request to the CRA tax services office is needed.

How it affects the tax

• The survivor includes the amount in their own income as a refund of premiums.
• The survivor can deduct it by transferring it to their own RRSP, or to a RRIF or annuity.
• A child or grandchild dependent because of impairment in physical or mental functions can instead roll it to their own RDSP, as the RDSP beneficiary, subject to the $200,000 lifetime RDSP limit.
• The deceased's final-return income is reduced by refund of premiums paid to qualifying survivors.
• A dependent child or grandchild who is not infirm can transfer only to an eligible annuity.

The transfer must be completed in the year the amount is received or within 60 days after the end of that year, and an RRSP transfer requires the survivor to be 71 or younger at the end of the year of the transfer. A survivor past that age limit cannot roll into an RRSP and instead transfers to a RRIF or annuity.

Where there is a surviving spouse or common-law partner and other beneficiaries, the spouse's share can be rolled over while the other beneficiaries' shares are included in the deceased's deemed income. Each recipient gets a T4RSP for their share. If the estate cannot pay the tax, a non-annuitant who received an RRSP amount can be jointly and severally liable for the part of the tax attributable to that amount.

RRIFs and the T1090

For a RRIF, the annuitant is deemed to have received the fair market value of all RRIF property immediately before death, and this is reported on the final return. A joint designation on Form T1090 lets a qualifying survivor be taxed on RRIF amounts paid to the estate.

A different route applies where a spouse or common-law partner is named successor annuitant: no deemed receipt applies, the RRIF continues, and the spouse is taxed only on the payments they later receive. A spouse who is not named can still qualify if the legal representative consents and the carrier agrees.

What to do next

• Check whether each RRSP and RRIF names the estate, a person or no one.
• Identify any beneficiary of the estate who may be a qualifying survivor.
• Ask the plan issuer and the CRA for the current version of the form and its filing instructions, since the filing deadline is not covered here.
• Coordinate the form with the transfer deadline, which is 60 days after the end of the year of receipt.
• Have an accountant check how the final return will be prepared before it is filed.

Every estate is different, so how this applies to yours depends on the plan, the beneficiaries and the timing. It is worth confirming the details with a lawyer or accountant.

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