2009 RESP Rules
RESP (Registered Education Savings Plan) Canada is a savings plan that is registered by the Government of Canada to allow savings for a child’s education to grows tax-free until the child is ready for his/her post-secondary education.
The child named in an RESP is known as a beneficiary. Unlike RRSPs (Registered Retirement Savings Plans), the contribution for RESP Canada is not tax deductible.
The 2007 Federal Budget made the followind changes regarding Canada RESP:
The $4,000 limit on annual RESP contributions was eliminited;
The lifetime RESP contribution limit was increased to $50,000 from $42,000;
The maximum annual amount of Basic CESG (Canada Education Savings Grant) that can be paid in any year was increased to $500 from $400 (and to $1,000 from $800 if there is unused grant room from previous years). The lifetime CESG for each child is still $7,200.
The students can access up to $2,500 of their income and grants for each 13-week semester of study.
The new RESP rules will benefit those families enormously who can make a lump some Canada RESP contribution up to $50,000 per child when their children are still young. Please talk to one of RESP providers such as banks and credit unions to see how you can benefit most from the new Canada RESP rules.
RESP (Registered Education Savings Plan) Canada is a savings plan that is registered by the Government of Canada to allow savings for a child’s education. An RESP grows tax-free until the child is ready to attend post-secondary education.
The child named in an RESP is known as a beneficiary. Unlike RRSPs (Registered Retirement Savings Plans), the contribution for RESP Canada is not tax deductible.
The 2007 Federal Budget made the following changes RESP rules:
- The $4,000 limit on annual RESP contributions was eliminited;
- The lifetime RESP contribution limit was increased to $50,000 from $42,000;
- The maximum annual amount of Basic CESG (Canada Education Savings Grant) that can be paid in any year was increased to $500 from $400 (and to $1,000 from $800 if there is unused grant room from previous years). The lifetime CESG for each child is still $7,200.
- The students can access up to $2,500 of their income and grants for each 13-week semester of study.
The new RESP rules will benefit families who can make a lump sum Canada RESP contribution up to $50,000 per child when their children are young.