Great review of RESP! Just to add a couple of points: - Of the money withdrawn for educational purposes, only Educational Assistant Payment (Grant & growth) are taxed at the hands of the beneficiary on the tax year of withdrawal. EAP withdrawal for the first 13 weeks of enrolment is limited to $5,000 (for full-time students). Post-secondary Education Payment (Contribution) are not taxable. At each withdrawal you can choose how much of EAP (taxable portion) and PSE (non-taxable) to withdraw. So if your child has income from co-op work in her 3rd year of university, for example, you may choose to withdraw mainly from PSE amount in that year to minimize his/her income tax for that year. - Depending on net family income level, the child may also be eligible to receive Canda Learning Bond (CLB) to his/her RESP as well: $500 for the first year of eligibility and $100 for each year of contribution, subject to maximum of $2,000. Not all RESP providers offer CLB application, so you may want to check with plan providers before deciding to open RESP.
Thank you so much for the detailed information! Great point on balancing the PSE and the EAP portion withdrawal to maximize the benefit and minimizing the taxable amount! CLB is definitely another avenue in which some families can maximize the additional contributions! 😊👍
Great video, man. We set up college savings accounts for both of our boys. It’s so crucial to get the ball rolling when our children are younger than waiting til the last minute.
What’s your thoughts on Post-secondary education? 😉
Great review of RESP! Just to add a couple of points:
- Of the money withdrawn for educational purposes, only Educational Assistant Payment (Grant & growth) are taxed at the hands of the beneficiary on the tax year of withdrawal. EAP withdrawal for the first 13 weeks of enrolment is limited to $5,000 (for full-time students). Post-secondary Education Payment (Contribution) are not taxable. At each withdrawal you can choose how much of EAP (taxable portion) and PSE (non-taxable) to withdraw. So if your child has income from co-op work in her 3rd year of university, for example, you may choose to withdraw mainly from PSE amount in that year to minimize his/her income tax for that year.
- Depending on net family income level, the child may also be eligible to receive Canda Learning Bond (CLB) to his/her RESP as well: $500 for the first year of eligibility and $100 for each year of contribution, subject to maximum of $2,000. Not all RESP providers offer CLB application, so you may want to check with plan providers before deciding to open RESP.
Thank you so much for the detailed information! Great point on balancing the PSE and the EAP portion withdrawal to maximize the benefit and minimizing the taxable amount! CLB is definitely another avenue in which some families can maximize the additional contributions! 😊👍
Top notch stuff, as usual, sir! Almost 100 subs!
Thank you Anthony! I am so excited to celebrate the milestone soon! 🥳🎉🎉🎉
Great video, man. We set up college savings accounts for both of our boys. It’s so crucial to get the ball rolling when our children are younger than waiting til the last minute.
Absolutely right! We want the time to be on our side 😉 even couple of years make a HUGE difference in 19 years time!
@@DaddyDirective, agreed! Interest adds up.
Yup! It’s beautiful when that interest works for your investment but devastating when it works on your debt 😝