Section 60.2 — Income Tax Act: Refund of undeducted past service AVCs

There may be deducted in computing a taxpayer’s income for a taxation year an amount equal to the total of where the taxation year ends before 1991, the total of all amounts each of which is that portion of an amount paid to the taxpayer before 1991 and included by reason of subparagraph 56(1)(a)(i) or paragraph 56(1)(h) or 56(1)(t) in computing the taxpayer’s income for the year or a preceding taxation year that can reasonably be considered to be a refund of additional voluntary contributions made by the taxpayer before October 9, 1986 to a registered pension plan for the taxpayer’s benefit in respect of services rendered by the taxpayer before the year in which the contributions were made, to the extent that the contributions were not deducted in computing the taxpayer’s income for any taxation year; and the least of $3,500, the total of all amounts each of which is an amount included after 1986 by reason of subparagraph 56(1)(a)(i) or paragraph 56(1)(d.2), 56(1)(h) or 56(1)(t) in computing the taxpayer’s income for the year, and the balance of the annuitized voluntary contributions of the taxpayer at the end of the year. For the purposes of subsection 60.2(1), balance of the annuitized voluntary contributions of a taxpayer at the end of a taxation year means the amount, if any, by which such part of the total of all amounts each of which is an additional voluntary contribution made by the taxpayer to a registered pension plan before October 9, 1986 in respect of services rendered by the taxpayer before the year in which the contribution was made, to the extent that the contribution was not deducted in computing the taxpayer’s income for any taxation year, as may reasonably be considered as having been used before October 9, 1986 to acquire or provide an annuity for the taxpayer’s benefit under a registered pension plan or registered retirement savings plan, or transferred before October 9, 1986 to a registered retirement income fund under which the taxpayer was the annuitant (within the meaning assigned by subsection 146.3(1)) at the time of the transfer exceeds the total of all amounts each of which is an amount deducted under paragraph 60.2(1)(b) in computing the taxpayer’s income for a preceding taxation year, or an amount deducted under paragraph 60.2(1)(a) in computing the taxpayer’s income for the year or a preceding taxation year, to the extent that the amount can reasonably be considered to be in respect of a refund of additional voluntary contributions included in determining the total under paragraph 60.2(2)(a).