All the Numbers

RESPs and the education grant

From the All the Numbers wiki · Savings accounts

A registered education savings plan (RESP) is an account for a child's post-secondary education. Contributions are not deductible, but the government adds a grant to them and the growth is not taxed while it stays in the plan. The CRA's summary is a 20% grant on contributions up to $500 a year and $7,200 for life, a $50,000 contribution limit, and education payments taxed to the student.[1] This entry covers putting money in; taking it out is covered in RESP withdrawals.

The rules

  • $50,000 lifetime contribution limit per beneficiary. Contributions are not deductible.[2] There is no annual limit on contributions, only on the grant.
  • Canada Education Savings Grant (CESG): 20% of contributions.[3] The basic grant matches the first $2,500 contributed each year, which is $500 a year,[4][5] and the grant stops at $7,200 for life.[6]
  • Unused grant room carries forward. A catch-up year can attract up to $500 of the carried-forward room on top, so the most the grant pays in one year is $1,000.[7][5]
  • The grant stops after the year the child turns 17.[8] In the years the child turns 16 and 17 it is paid only if, before the year they turned 16, either $2,000 was contributed and left in, or at least $100 a year was contributed in any four years.[9]
  • Additional CESG. Lower- and middle-income families get an extra 10% or 20% on the first $500 contributed each year, depending on the primary caregiver's adjusted income. It does not carry forward.[10] The Canada Learning Bond is a separate payment for low-income families that needs no contribution.
  • Time limits. A plan can take contributions until the end of the 31st year after it was opened and must be closed by the end of the 35th.[11]
  • Withdrawals of growth and grant, called Educational Assistance Payments, are taxed to the student, who usually has little other income and tuition credits to offset it.[12]

An RESP for a child in your plan

When you add a child, All the Numbers asks whether you have an RESP for them or want to open one. It never adds one by itself. An RESP you open there puts in $2,500 a year, a twelfth each month: the amount the basic grant matches. It stops once your contributions have earned the whole $7,200 grant, or after the year the child turns 17.[13] Putting in more only shelters growth; the grant is what most families open one for. You can change the amount on the account.

What the engine does

  • Applies the 20% grant with both caps, and warns when the lifetime grant is exhausted or a contribution is trimmed to the $50,000 limit.
  • Stops scheduled contributions in the month the $50,000 limit is reached, with the last one cut to the room left. The excess is neither contributed nor penalised.[14]
  • Taxes the grant and growth that come out as the student's income, not yours; see RESP withdrawals.
  • Stops a monthly contribution after the year the child turns 17, the last year the grant is paid; the account then grows until the education payments.[15]
  • Needs the child's birth year to know when grant eligibility ends. Each RESP belongs to one of the children you enter, and takes their birth year; without one it warns rather than assuming an age.
  • Starts from what your plan statement shows. All the Numbers asks for contributions to date and grants received to date. Everything else in the balance is treated as growth. If the statement split is not given, the whole balance is taken as your own contributions, with no grant received and no growth.[16]
  • Works out unused grant room from the birth year: $500 for each year from 2007 in which the child was under 18 at year end, less the grant already received. It takes all contributions to date as left in before the child turned 16, and the four-year $100 test as not met.[17] That is the reading that never pays a grant the rules would refuse.
  • Takes the plan as opened in the child's birth year when you do not say, which is the earliest possible opening and the strict reading of the 35-year limit.[18]
  • Treats the beneficiary as a Canadian resident who is eligible for the basic grant in every year of the plan, with no additional grant and no Canada Learning Bond.[19] Those two depend on family income, which All the Numbers does not ask for; see benefits tested on family income.

What it deliberately does not

The engine can pay the additional grant and the Canada Learning Bond when it is told, year by year, that a family qualifies, but All the Numbers has nowhere to say so. A plan for a lower-income family therefore shows less grant than it would receive. Family plans shared between siblings, plan transfers, a change of beneficiary and provincial grants (Ontario has none) are not modelled.

See also: income tax brackets and your marginal rate.

See also

  • Auto-allocation · When switched on, money left after spending and your own contributions is placed for you down a priority list — FHSA, then RRSP, then TFSA, then non-registered by default — each account taking what its room allows. Every dollar it moves is shown, by account, on each month and year.
  • Benefits tested on family income · The Canada Child Benefit, the GST/HST credit, the provincial child benefits and the Ontario Trillium Benefit are calculated on family net income and on facts about children and rent. All the Numbers pays the child benefits for the children you enter, and the GST/HST credit and your province's sales-tax and low-income credits to every household; Ontario's energy and property tax credit is not yet in a plan.
  • Children, childcare and an RESP for each child · Enter each child's birth year and the plan pays the Canada Child Benefit and your province's child benefit, counts childcare as spending until school age, and pays each child's RESP out as education payments by their early twenties.
  • Contributions the plan could not fund in full · Each month's leftover joins cash, and each contribution takes what cash can give it, in the order the accounts are listed. A contribution that cash cannot cover is funded in part rather than by an overdraft that does not exist, and the plan says so.
  • Income tax brackets and your marginal rate · Federal and Ontario tax are each charged in slices of income at rising rates, then reduced by credits, with an Ontario surtax and health premium on top. The marginal rate is what the next dollar costs; the average rate is total tax over income.
  • Over-contributions to a TFSA or RRSP · Putting more into a TFSA or RRSP than your room allows is taxed at 1% a month on the excess. An RRSP has a $2,000 cushion that is not taxed. All the Numbers never lets a contribution exceed room, so a plan does not include this tax.
  • Taking money out of an RESP · Your own contributions come back tax-free. The grant and growth leave as education payments taxed to the student. If no one studies, growth is taxed to you with an extra 20%, and the grants are repaid. All the Numbers pays contributions first.
  • The Canada Learning Bond · A government payment into a child's RESP for lower-income families, $500 for the first year and $100 for each later year, to $2,000, with no contribution needed. All the Numbers does not claim it because it does not ask for family income.
  • The tuition credit · Eligible tuition fees earn a federal credit at the lowest tax rate. Unused credit carries forward without limit, and a student can pass part of the current year's credit to a spouse or parent. All the Numbers does not ask for tuition, so plans do not include it.

References

  1. ↑CRA — Registered Education Savings Plans · RESP brief: CESG 20% match up to $500/yr per child ($7,200 lifetime), lifetime contribution limit $50,000; EAP taxable to student, PSE (contributions) returned tax-free · See the source · effective 2007-01-01
  2. ↑Income Tax Act s.204.9(1), definition "RESP lifetime limit for a year" · RESP lifetime contribution limit per beneficiary · $50,000 · effective 2007-01-01
  3. ↑Canada Education Savings Act s.5 ("20% of the contribution") · Canada Education Savings Grant basic matching rate on RESP contributions · 20% · effective 1998-01-01
  4. ↑Canada Education Savings Act s.5; $1,000 annual ceiling covers one carried-forward year · CESG basic annual maximum per beneficiary (the match on the eligible contribution) · $500 · effective 2007-01-01
  5. ↑Canada Education Savings Act s.5 · Contributions each year that basic CESG matches, plus carried-forward grant room up to the annual maximum with carry-forward · $2,500 · effective 2007-01-01
  6. ↑Canada Education Savings Act s.5 ("Not more than $7,200... during their lifetime") · CESG lifetime maximum per beneficiary · $7,200 · effective 1998-01-01
  7. ↑Canada Education Savings Act s.5 ("the lesser of $1,000") · CESG annual maximum payable including one year of carried-forward room · $1,000 · effective 2007-01-01
  8. ↑Canada Education Savings Act s.5 with ESDC administrative age rules · Last age at which CESG is payable — the calendar year of the beneficiary's 17th birthday (ages 16-17 carry extra conditions, not modelled) · 17 years · effective 2007-01-01
  9. ↑ESDC — Estimating amounts: CESG for children aged 16 or 17 · CESG is payable in the years the beneficiary turns 16 or 17 only if, before the year they turned 16, either at least $2,000 was contributed and not withdrawn, or at least $100 a year was contributed in any four years · See the source · effective 1998-01-01
  10. ↑ESDC Notice 1114 — 2026 Additional CESG income brackets · Additional CESG: an extra 10% or 20% on the first $500 contributed each year, by the primary caregiver's adjusted income bracket (brackets indexed annually; 2026 per ESDC Notice 1114); does not carry forward · See the source · effective 2026-01-01
  11. ↑CRA Guide RC4092, Registered Education Savings Plans · An individual RESP may accept contributions until the end of the 31st year after the year it was opened and must terminate by the end of the 35th year (ITA 146.1(2)(h)–(i)); RESPs have existed since 1972 · See the source · effective 2008-01-01
  12. ↑Income Tax Act s.146.1(7) · Educational assistance payments (grants + growth) are included in the STUDENT's income, not the subscriber's; contributions come back tax-free · effective 1998-01-01
  13. ↑Our convention; Canada Education Savings Act: the grant is 20% of the first $2,500 contributed each year, up to $7,200 a child · An RESP opened from a child's row puts in the yearly amount the basic grant matches ($2,500), a twelfth each month, until its contributions have earned the lifetime grant ($36,000 in, at 20%), or the year the child turns 17; only when the household has or opens one, never for a household without children; reported on the run · effective 2026-10-28
  14. ↑ITA 204.9 (RESP lifetime limit), 204.91 (1% per month on the excess) · Scheduled RESP contributions stop in the month the lifetime limit per beneficiary is reached (the last one is clipped to the room left); the excess is neither contributed nor penalised · $50,000 · effective 2026-09-20
  15. ↑Canada Education Savings Act s.5 (grant paid for contributions until the end of the year the beneficiary turns 17) · Monthly RESP contributions stop at the end of the year the child turns 17, the last year the grant is paid; the account then grows until the education payments · 17 years · effective 2026-10-13
  16. ↑CRA RC4092 (contributions vs. EAP components); our convention · An RESP balance with no statement split is taken as entirely the subscriber's own contributions — no grant received, no growth — until the statement figures are entered; reported on the run · See the source · effective 2026-09-20
  17. ↑ESDC, estimating CESG amounts (room accrues whether or not an RESP was open); CESA s.5(4)–(7); our convention · An RESP row on the planner form is the beneficiary's only plan; contributions and CESG to date come from the promoter statement; unused basic grant room is $500 for each year from 2007 the beneficiary was under 18 at year end, less CESG received; all contributions are taken as retained before age 16 with the four-year $100 test unmet; no EAP has been paid before the plan · See the source · effective 2026-09-20
  18. ↑ITA 146.1(2)(i); our convention · When the form does not say when an RESP was opened, the beneficiary's birth year is used — the earliest possible opening, and the strict reading of the 35-year termination limit · effective 2026-09-20
  19. ↑CESA s.5(4) (Additional CESG by adjusted income), s.6 (CLB); our convention · An RESP beneficiary on the planner form is taken as resident in Canada and CESG-eligible in every plan year, with no Additional CESG and no Canada Learning Bond claimed, until the form can hold the income-tested facts · See the source · effective 2026-09-20