REGISTERED EDUCATIOAL SAVINGS PLANS (RESPs)
Maximum Contribution - There is no annual limit for contributions to RESPs. For each beneficiary the lifetime amount that can be contributed to an RESP is $50,000.
Contribution Age Limit - Contributions can be made until December 31 of the 31st year following the year the plan is entered into. Family plan only: final contribution must be made before the beneficiary’s 31st birthday.
Plan Age Limit – The RESP must be collapsed before December 31st of the 35th year following the year the plan is entered into.
Tax on Over-Contribution – Equals 1% per month of the over-contribution amount at the end of the month
Basic Canada Education Savings Grant (CESG) – Equals 20% on annual contributions made to all eligible RESPs for a qualifying beneficiary, to an annual maximum of $500 ($1,000 where there is unused grant room from a previous year.
Unused CESG grants may be carried forward for possible use in the future. Lifetime maximum CESG amount per beneficiary is $7200.
Refer to CRA for further limitations that may apply.
Additional CESG (family income under $43,953) - CESG on the first $500 in annual RESP contributions is 20%
Additional CESG (family income $43,953 to $87,907) - CESG on the first $500 in annual RESP contributions is 10%
Canada Learning Bond (CLB) - Provides $500 at birth and $100 annually to a maximum of $2000 until age 15 for children born after 2003 to families entitled to the National Child Benefit Supplement. It is paid only in years when the family’s income qualifies.
- Educational Assistance Payment: Grant monies and accumulated income payable to the beneficiary and taxable as earned income to the beneficiary.
- Post-Secondary Capital Withdrawal: Payable to the subscriber who may gift it to the subscriber or retain it for himself/herself with a tax penalty
- Accumulated Income Payment: Subject to certain conditions, payable to subscriber who can transfer the amount to his/her RRSP. If taken as cash, amount is taxable base on subscriber’s marginal tax rate plus an additional 20% withholding tax. Amounts can also be paid to a designated educational institution in Canada
- Non-Educational Capital Withdrawal: Triggers the requirement to pay back CESG equal to 20% of the amount of the withdrawal.
Provincial Grants - May be available in some province and varies from province to province. Check the applicable provincial legislation.