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Registered Education Savings Plan (RESP)

RESP, registered education savings plan, education savings
education savings, RESP, saving for your child's future

REGISTERED EDUCATION SAVINGS PLAN (RESP) – Saving for your child’s future

A Registered Education Savings Plan (RESP) is an investment contract available to parents in Canada to save for their children’s post-secondary education which includes university, college, or other designated educational institution in Canada, a certified course that develops or improve skills in an occupation as approved by Employment and Social Development Canada (ESDC), or a university, college, or other educational institution outside Canada that has courses at the post-secondary school.

CONTRIBUTION LIMITS

Since 2007 there is no annual limit for contributions however there is a lifetime limit per beneficiary of $50,000.  RESP contributions cannot be deducted from your income on your income tax and benefit return.  Since the intended beneficiary is expected to have low or nil income while attending post secondary education, use of the RESP will have no tax implications.

A beneficiary under a family plan entered into after 1998, must be less than 21 years of age at the time he or she is named as a beneficiary.   When one family plan is transferred to another, a beneficiary who is 21 years of age or older can still be named a beneficiary to the new RESP.

You can designate an individual as a beneficiary under the RESP only if:

  • the individual’s social insurance number (SIN) is given to the promoter before the designation is made; and
  • the individual is a resident of Canada when the designation is made.

OPENING AN RESP

Follow these two easy steps:

WHO CAN OPEN AN RESP?

Anyone—parents, grandparents, other family members and friends—can open an RESP for a child.  RESPs can be opened by one person, or opened jointly by spouses or common-law partners.  They can also be opened by child-care agencies.  While you can open a plan for a child, you can also name yourself or another adult as the beneficiary.

Selecting the right RESP

It is very important to choose the right type of RESP.  We can help guide you.

Family Plan

A family plan is ideal if you have more than one child.

You can name one or more children to receive the savings when it is time to pay for their studies after high school.  The children must be related to you, either by blood or adoption.  They may be your children, stepchildren, grandchildren (including adopted grandchildren), brothers or sisters.

Individual (non-family) Plan

This type of plan is ideal if you are not related to the child you are saving for.  In this type of plan, only one beneficiary is named in the RESP, and the beneficiary does not have to be related to you.

Group Plan

A group plan is for one child only, and the child does not have to be related to you.

A group plan is ideal if you can make regular payments throughout the term of the RESP.  In this type of plan, your savings are combined with those of other people.  How much each child gets depends on how much money is in the group account, and on the number of students of the same age who are in school that year.

These plans are provided by group plan dealers who usually invest the money in low-risk investments.

RESP, registered education savings plan, saving for your child's education, post-secondary education, funding education

Hello,

Our office is fully operational, however closed to client access at this time in order to keep our staff, families and clients safe.

We are happy to speak to you on the phone or via email correspondence. You can also visit the link below for important and up to date Covid-19 information for personal and business purposes.

https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html

We can accept your business or personal documents via the convenient and secure portal on our website. If you prefer to drop off your paperwork, you can through the mail slot at our office.

All documents can be signed securely via our electronic signature software and are accepted via e-file to Revenue Canada.

We are here to assist you, please contact us if you need.

Thank you and stay healthy and safe.

C. Elaine McMahon, CPA, CGA
Chartered Professional Accountant