A RESP is a government-approved plan for the purpose of providing post-secondary education funding for a beneficiary. Income earned within the plan is not taxed until it is withdrawn.
RESP Contribution Limits: Effective June 22, 2007, the RESP Annual Limit of $4,000.00 was eliminated and the maximum Lifetime Limit was increased to $50,000.00, for 2007 and subsequent taxation years.
The Canada Education Savings Act was amended effective June 22, 2007, and the Canadian Education Savings Grant was increased to 20% on the first $2,500.00 contributions made in 2007.
The subscriber is the registered owner of the plan and can be an individual or an individual and his/her spouse. Only the subscriber can make contributions to an RESP and these contributions are not tax deductible.
The beneficiary is eligible to receive the payments from the plan. There is a limit of one beneficiary per plan, except under a Family Plan, which provides for multiple beneficiaries. The beneficiaries of a Family Plan must be “related” to the subscriber.
The Canada Education Savings Act was amended effective June 22, 2007, and the Canadian Education Savings Grant was increased to 20% on the first $2,500.00 contributions made in 2007. More on the Canada Education Savings Grant is available here.
