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Registered Education Savings Plans (RESPs)

From: Canada Revenue Agency

RC4092(E) Rev. 23

The CRA's publications and personalized correspondence are available in braille, large print, e-text, and MP3. For more information, go to Order alternate formats for persons with disabilities or call 1-800-959-8281.

Find out if this guide is for you

Use this guide if you want information about the registered education savings plans (RESPs). This guide has information which is not in the income tax and benefit package and which you may need to fill out your income tax and benefit return. We have included definitions for some of the terms used in this guide in the Definitions sections. You may want to read this section before you start.

La version française de ce guide est intitulée Les régimes enregistrés d’épargne–études (REEE). Unless otherwise stated, all legislative references are to the Income Tax Act or, where appropriate, the Income Tax Regulations.

Table of contents

Definitions

This section provides a general definition of the technical terms that we use in this guide.

Advantage – any benefit, or debt that is conditional on the existence of the RESP, subject to certain exceptions for normal investment activities and conventional incentive programs.

An advantage also includes any benefit that is an increase in the total fair market value (FMV) of the property of the RESP that is reasonably attributable to any one of the following:

An advantage also includes a registered plan strip or any benefit that is income or a capital gain that is reasonably attributable to one of the following: 

For more information on advantages, see Income Tax Folio S3–F10–C3, Advantages- RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Adjusted family net income – this is your family net income minus any Canada child benefit and registered education savings plan (RESP) income received plus any Canada child benefit and RESP amounts repaid.

Arm’s length – refers to a relationship or a transaction between unrelated persons who act in their separate interests. An arm’s length transaction is generally a transaction that reflects ordinary commercial dealings between parties acting in their separate interests.

Common law partner – a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. The person:

Note

In this definition, "12 continuous months" includes any period that you were separated for less than 90 days because of a breakdown in the relationship.

Fair market value (FMV) – is generally considered to mean the highest price expressed in terms of money that can be obtained in an open and unrestricted market between informed and prudent parties, who are dealing at arm's length and under no compulsion to buy or sell. For information on the valuation of securities of closely held corporations, see Information Circular IC89–3, Policy Statement on Business Equity Valuations.

Non-arm’s length – generally refers to a relationship or transaction between persons who are related to each other. However, a non-arm’s length relationship might also exist between unrelated individuals, partnerships or corporations, depending on the circumstances.

For more information, see the definition of Arm's length.

Non-qualified investment – any property that is not a qualified investment for the RESP trust. For more information on non-qualified investments see Income Tax Folio S3–F10–C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Prohibited investments – this is property to which the RESP subscriber is closely connected. It includes any of the following:

A prohibited investment does not include a mortgage loan that is insured by the Canada Mortgage and Housing Corporation or by an approved private insurer. It also does not include certain investment funds and certain widely held investments which reflect a low risk of self-dealing.

For more information on prohibited investments, see Income Tax Folio S3–F10–C2, Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Registered education savings plan (RESP) – a registered contract between an individual (the subscriber) and a person or organization (the promoter). The subscriber generally makes contributions to the RESP, which earns income, paid in the form of educational assistance payments to one or more identified beneficiaries.

Registered plan strip – the amount of a reduction in the FMV of property of the RESP, if the value is reduced as part of a transaction or event (or series) for which one of the main purposes is to enable the subscriber (or non-arm’s length person) to obtain a benefit in respect of the property of the RESP or to obtain a benefit as a result of the reduction. Exceptions are provided for plan distributions that are included in income, or specifically excluded from income (such as a tax-deferred transfer between plans).

For more information on a registered plan strip, see Income Tax Folio S3–F10–C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Related persons – are not considered to deal with each other at arm's length. Related persons include individuals connected by blood relationship, marriage, common-law partnership, or adoption (legal or in fact). A corporation and another person or two corporations may also be related persons.

Specified non-qualified investment income – any income (excluding the dividend gross-up), or a capital gain that is reasonably attributable, directly or indirectly, to an amount that is taxable for any RESP of the subscriber (for example, subsequent generation income earned on non-qualified investment income).

Spouse – a person to whom you are legally married.

Swap transaction – any transfer of property between the RESP and its subscriber (or non-arm's length person). Exceptions are provided for contributions to and distributions from the RESP, purchase and sale transactions between the RESP and another RESP of the subscriber, and transactions relating to insured mortgages.

For more information on swap transactions and applicable transitional rules, see Income Tax Folio S3–F10–C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Unrelated persons – may not be dealing with each other at arm's length at a particular time. Each case will depend upon its own facts. The following criteria will be used to determine if the parties to a transaction are not dealing at arm's length:

For more information, see Income Tax Folio S1-F5-C1, Related Persons and Dealing at Arm's Length.

What is a Registered Education Savings Plan

A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter).

Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.

Family plans are the only RESP that allow subscribers to name more than one beneficiary. Each beneficiary must be connected by blood relationship or adoption to each living subscriber or have been so tied to a deceased original subscriber.

The Canada Revenue Agency registers the education savings plan contract as an RESP, and lifetime limits are set by the Income Tax Act on the amount that can be contributed for each beneficiary (see RESP contribution limits). Unless the RESP is a specified plan, the RESP must provide that no contributions (except transfers from another RESP) may be made to the plan at any time after the end of the year that includes the 31st anniversary of the opening of the plan. Furthermore, the plan has to be completed by the end of the year that includes the 35th anniversary of the opening of the plan.

The subscriber (or a person acting for the subscriber) generally makes contributions to the RESP. Subscribers cannot deduct their contributions from their income on their income tax and benefit return.

The promoter usually pays the contributions, and the income earned on those contributions, to the beneficiaries. The income earned is paid as EAPs.

For more information on EAPs, go to Educational assistance payments.

If the contributions are not paid out to the beneficiary, the promoter usually pays them to the subscriber at the end of the contract. Subscribers do not have to include the contributions in their income when they get them back.

Beneficiaries generally receive the contributions and the EAPs from the promoter. They have to include the EAPs in their income for the year in which they receive them. However, they do not have to include the contributions they receive in their income.

Specified plan

A specified plan is essentially a single beneficiary RESP (non-family plan) under which the beneficiary is entitled to the disability tax credit for the beneficiary's tax year that includes the 31st anniversary of the plan. Furthermore, a specified plan cannot permit another individual to be designated as a beneficiary under the RESP at any time after the end of the year that includes the 35th anniversary of the plan.

In addition, no contributions (except transfers from another RESP) may be made to the plan at any time after the end of the year that includes the 35th anniversary of the plan, and the plan must be completed by the end of the year that includes the 40th anniversary of the plan.

The following diagram gives an overview of how an RESP generally works.

How an RESP works

Government Grants

Canada Education Savings Grant

The Government of Canada encourages the use of registered education savings plans (RESPs) to save for a child's post-secondary education, which includes full or part-time studies at a trade school, CEGEP, college, university, or in an apprenticeship program.

Employment and Social Development Canada (ESDC) administers two education savings incentives linked to RESPs, the Canada Education Savings Grant and the Canada Learning Bond.

The Canada Education Savings Grant (CESG) consists of a basic grant of 20% on the first $2,500 in annual personal contributions to an RESP (this grant is available to all eligible children regardless of their adjusted family net income), as well as the additional amount of CESG, which is:

The CESG is available until the calendar year in which the beneficiary turns 17, and the maximum lifetime amount, including the additional amount of CESG, is $7,200.

The following chart gives you a brief overview of how the CESG is calculated depending on the adjusted family net income:

Canada Education Savings Grant summary chart
Adjusted family net income for 2023 $50,539 or less
 more than $50,539 but less than $106,717 more than $106,717
Additional amount of CESG on the first $500 of annual RESP contributions 20% = $100

10% = $50

 Beneficiary is not eligible
Basic CESG on the first $2,500 of annual RESP contributions 20% = $500 20% = $500 20% = $500
Maximum yearly CESG depending on income and contributions $600 $550 $500
Lifetime maximum CESG for which you may qualify $7,200 $7,200 $7,200

Every child under age 18 who is a resident of Canada will accumulate $400 (for 1998 to 2006) and $500 (from 2007 and subsequent years) of unused CESG room. Unused CESG room is carried forward and used when RESP personal contributions are made in future years provided that the specific contribution requirements for beneficiaries who attain 16 or 17 years of age are met.

Beneficiaries qualify for a grant on the contributions made on their behalf up to the end of the calendar year in which they turn 17 years of age.

However, since the CESG has been designed to encourage long term savings for post-secondary education, there are specific contribution requirements for beneficiaries who attain 16 or 17 years of age. Beneficiaries who are 16 or 17 years old may be eligible to receive the CESG if at least one of the following two conditions is met:

This means that you must start to save in RESPs for your child before the end of the calendar year in which your child turns 15 years of age in order for your child to be eligible to receive the CESG.

The CESG and accumulated earnings will be part of the EAPs paid out of the RESP to the beneficiary.

If the beneficiary does not pursue post-secondary education, the CESG is returned to the government.

Canada Learning Bond

Employment and Social Development Canada (ESDC) provides an additional incentive of up to $2,000 to help low-income families start saving early for their child's education after high school (post-secondary education).

The Canada Learning Bond (CLB) money will be deposited directly into the child's RESP.

The CLB is available for eligible children from low-income families born in 2004 or later and provides an initial payment of $500 for the first year the child is eligible, plus $100 for each additional year of eligibility, up to age 15, for a maximum of $2,000. Personal contributions are not required to receive the CLB. To help cover the cost of opening an RESP, ESDC will pay $25 into the RESP to which the initial CLB of $500 is deposited in recognition of a one-time incidental expense that may be associated with opening the RESP account.

Children who are in care of a public primary caregiver for whom a special allowance under the Children's Special Allowance Act is paid, are also entitled to the CLB.

Youth who meet the minimum age requirement to open an RESP in their province of residence can be their own subscriber of an RESP and request the CLB for themselves.

The beneficiary must be under the age of 21 at the time of application.

If the beneficiary does not pursue post-secondary education, the CLB is returned to the government.

For more information on the CLB, call 1-800-O-CANADA (1-800-622-6232).

Quebec Education Savings Incentive (QESI) 

The Quebec education savings incentive (QESI) is a tax measure that encourages Quebec families to start saving early for the education of their children and grandchildren.

The incentive, which came into effect on February 21, 2007, consists of a refundable tax credit that is paid directly into an RESP opened with an RESP promoter that offers the QESI.

For the credit to be paid to your account, the trustee designated by your RESP promoter must apply for it with Revenu Quebec.

If you wish to open an RESP, you may contact an RESP promoter that offers the QESI, such as any of the following:

For more information, go to Revenu Quebec or call Service Quebec at 1-800-267-6299.

BC Training and Education Savings Grant Program (BCTESG)

Families in British Columbia are encouraged to start planning and saving early for their children’s post-secondary education or training program. To help, the B.C. Government will contribute a grant of $1,200 to eligible children through the BCTESG.

To be eligible for the BCTESG, a child must meet the following three criteria:

Children are eligible for the BCTESG on their sixth birthday up until the day before their ninth birthday.

For more information, go to Province of British Columbia or call the Canada Education Savings Program at 1-888-276-3624.

Who can be a subscriber

2023 legislative changes

Divorced or separated individuals who are both legal parents can jointly open RESPs for one or more of their children, or move an existing joint RESP to another promoter.

If you are both legal parents of the beneficiary, you and your former spouse or common-law partner can be joint subscribers under an RESP.

Except for family plans, generally, there are no restrictions on who can be the original subscriber under an RESP:

If you are not the original subscriber, you can become a subscriber only if one of the following situations applies:

All subscribers under an RESP have to give their social insurance number (SIN) to the promoter before CRA can register the RESP. Where the subscriber is a public primary caregiver, we request that they provide the promoter with their business number.

Designating a beneficiary

You can designate an individual as a beneficiary under the RESP only if both of the following conditions are met:

Notes

An education savings plan may permit a non-resident individual who does not have a SIN to be designated as a beneficiary under the plan provided that the designation is being made in conjunction with a transfer of property into the plan from another RESP that was entered into before 1999 and under which the individual was a beneficiary immediately before the transfer.

A beneficiary under a family plan entered into after 1998, must be less than 21 years of age at the time they are 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.

RESP contributions

You will be able to make contributions for a beneficiary only if one of the following two conditions is met:

Note

If the plan was entered into before 1999, the beneficiary's SIN will not be required. However, such contributions will continue to be ineligible for the Canada Education Savings Grant (CESG).

Generally, you can contribute to family plans for beneficiaries who are under 31 years of age at the time of the contribution. However, transfers can be made from another family plan even if one or more of the beneficiaries are 31 years of age or older at the time of the transfer.

RESP contracts can take advantage of the new age limit as long as the specimen plan under which the contract is held is amended. The amendment must be applicable for 2008 and subsequent taxation years.

RESP contributions cannot be deducted from your income. In addition, you cannot deduct the interest you paid on money you borrowed to contribute to an RESP.

RESP contribution limits

For 2007 and later years, there is no annual limit for contributions to RESPs, however, the lifetime limit on the amounts that can be contributed to all RESPs for a beneficiary is $50,000.

Payments made to an RESP under the Canada Education Savings Act or under a designated provincial program are not included when determining if the lifetime limit has been exceeded.

Tax on RESP excess contributions

An excess contribution occurs at the end of a month when the total of all contributions made by all subscribers to all RESPs for a beneficiary is more than the lifetime limit for that beneficiary. We do not include payments made to an RESP under the Canada Education Savings Act or any designated provincial program when determining whether a beneficiary has an excess contribution.

Each subscriber for that beneficiary is liable to pay a 1% per-month tax on their share of the excess contribution that is not withdrawn by the end of the month. The tax is payable within 90 days after the end of the year in which there is an excess contribution. An excess contribution exists until it is withdrawn.

You have to inform us of your share of the excess contribution to all RESPs for a beneficiary. To calculate the amount of tax you have to pay on your share of the excess contribution for a year, fill out Form T1E–OVP, Individual Tax Return for RESP Excess Contributions.

You can get this form on our web site by going to Forms and publications.

Send your completed T1E-OVP return to the following address:

Canada Revenue Agency
Registered Plans Directorate
875 Heron Rd
Ottawa ON K1A 0L5

There are limits on the amounts that can be contributed to RESPs for a beneficiary.

For each beneficiary, the annual limit for contributions to all RESPs is the following:

For each beneficiary, the lifetime limit for contributions to all RESPs is the following:

Note

You can reduce the amount subject to tax by withdrawing the excess contributions. However, in determining whether the lifetime limit has been exceeded, we include the withdrawn amounts as contributions for the beneficiary even though they have been withdrawn.

Example (lifetime limit)

In 2012, Hugh established an RESP for his son Allan and contributed a total of $32,000 to it prior to 2023. Allan’s grandmother, Cathy, also opened an RESP for Allan in 2012, and prior to 2023, contributed $16,000 to it. None of the prior year contributions made by Hugh and Cathy exceeded the annual or lifetime limits that were applicable in those prior years.

In January 2023, Hugh contributed $1,000 and Cathy contributed $500 to their respective RESPs and in July, both Hugh and Cathy contributed an additional $500. Hugh subsequently withdrew $500 in December.

The lifetime limit on all contributions that can be made to all RESPs for Allan is $50,000. Together Hugh and Cathy had contributed $48,000 to RESPs for Allan before 2023 and at the end of January 2023, the total contributions were $49,500 which was still within the lifetime limit for contributions to RESPs for Allan. However, at the end of July the total contributions were $50,500 and the lifetime limit was exceeded by $500.

Hugh and Cathy's share of the lifetime contributions
RESP contribution Hugh Cathy
Before 2023 $32,000 $16,000
January 2023 $1,000 $500
July 2023 $500 $500
December 2023 (withdrawal) ($500) 0
Share of the lifetime contributions $33,500 $17,000
Excess contributions
Hugh's lifetime contributions for Allan before 2023 $32,000
Cathy's lifetime contributions for Allan before 2023 $16,000
Total contributions for Allan before 2023 $48,000
Maximum lifetime limit remaining (50,000 − 48,000) $  2,000
Total of contributions made in 2023 for Allan $  2,500
Excess contributions $     500

Hugh's share of the lifetime excess contributions for 2023 was $300. This was determined by multiplying his proportion of the total contributions made to both RESPs in 2023 ($1,500 ÷ $2,500) by the excess ($500) or ($1,500 ÷ $2,500 × $500). Similarly, Cathy's share was $200 ($1,000 ÷ $2,500 × $500).

Hugh's tax payable for 2023 is calculated as follows:
Hugh's tax on his share of the excess contribution is calculated for each month the excess contribution remains in the RESP. For July to November, Hugh's tax is $300 × 1% × 5 months or $15.00.

Cathy's tax payable for 2023 is calculated as follows:
Cathy's tax on her share of the excess contribution is calculated for each month the excess contribution remains in the RESP. For July to November, Cathy's tax is $200 × 1% × 5 months or $10.00. Because Hugh withdrew the excess amount in December 2023, neither Cathy nor Hugh must pay any tax on the excess contribution in December.

Waiver or cancellation of liability

We may waive or cancel all or part of the taxes if we determine it is fair to do so after reviewing all factors, including whether the tax arose because of a reasonable error and whether the tax also gave rise to more than one tax under the Income Tax Act. To consider your request, we need a letter that explains why the tax liability arose, why this is a reasonable error, and why it would be fair to cancel or waive all or part of the tax.

Note

A waiver refers to penalties and interest otherwise payable by a taxpayer for which relief is granted by the CRA before these amounts are assessed or charged to the taxpayer. A cancellation refers to penalties and interest amounts that were assessed or charged to the taxpayer for which relief is granted by the CRA.

Send your letter to the following address:

Canada Revenue Agency
Registered Plans Directorate
875 Heron Rd
Ottawa ON K1A 0L5

Payments from an RESP

The promoter can make the following types of payments:

Refund of contributions to the subscriber or the beneficiary

Subject to the terms and conditions of the RESP, the promoter can return your contributions to you tax-free when the contract ends or at any time before.

Promoters do not issue a T4A slip, Statement of Pension, Retirement, Annuity and Other Income, to report these payments. Do not include these payments as income on your income tax and benefit return.

The promoter can also pay the contributions tax-free to the beneficiary. This is in addition to any taxable educational assistance payments. Refer to the next section for more details.

Educational Assistance Payments

An educational assistance payment (EAP) is the amount paid to a beneficiary (a student) from an RESP to help finance the cost of post-secondary education. An EAP consists of the Canada education savings grant, the Canada learning bond, amounts paid under a designated provincial program and the earnings on the money saved in the RESP. The promoter reports EAPs in box 042 on a T4A slip and sends a copy to the student. The student includes the EAPs as income on their income tax and benefit return for the year the student receives them.

Note

A beneficiary must be a resident of Canada in order to receive the CESG or CLB as part of the EAP. Contact the appropriate provincial authorities to determine residency requirements for the eligibility conditions for provincial grants and incentives.

The promoter can only pay EAPs to or for a student if one of the following situations applies:

A beneficiary is entitled to receive EAPs for up to six months after ceasing enrolment, provided that the payments would have qualified as EAPs if the payments had been made immediately before the student's enrolment ceased.

A qualifying educational program is an educational program at post-secondary school level, that lasts at least three consecutive weeks, and that requires a student to spend no less than 10 hours per week on courses or work in the program.

A specified educational program is a program at post-secondary school level that lasts at least three consecutive weeks, and that requires a student to spend not less than 12 hours per-month on courses in the program.

A post-secondary educational institution includes all the following:

Limit on EAPs

2023 legislation changes

 
Limit on EAP Previous 2023 Legislation Changes
For studies in a qualifying educational program $5,000 $8,000
For studies in a specified educational program $2,500 $4,000

The maximum amount of EAPs that can be made to a student as soon as they qualify to receive them is one of the following:

Subject to the terms and conditions of the RESP, the promoter can supplement the $8,000 or $4,000 EAP by paying a portion of the contributions tax-free to the beneficiary.

ESDC may, on a case-by-case basis, approve an EAP amount of more than the above limit if the cost of tuition plus related expenses for a particular program is substantially higher than the average. For more information on how to request approval of an EAP of more than $8,000 or $4,000, promoters should call the Canada Education Savings Program at 1-888-276-3624.

Accumulated income payments

Accumulated income payments (AIPs) are amounts, usually paid to the subscriber, of the income earned from an RESP. An AIP does not include any of the following:

AIPs cannot be made as a single joint payment to separate subscribers.

An RESP may allow for AIPs when both of the following conditions are met:

Note

When more than one individual is entitled to receive AIPs from the plan, the payments must be made separately to each person. No joint payments are allowed.

Also, any one of the following three conditions must apply:

Note

We may waive the conditions in the first bullet if it is reasonable to expect that a beneficiary under the RESP will not be able to pursue post-secondary education because they suffer from a severe and prolonged mental impairment. Such requests have to be made by the RESP promoter in writing to the following address:

Canada Revenue Agency
Registered Plans Directorate
875 Heron Rd
Ottawa ON  K1A 0L5

An RESP must be terminated by the end of February of the year after the year in which the first AIP is paid.

How AIPs are taxed

Promoters report AIPs in box 040 of a T4A slip, Statement of Pension, Retirement, Annuity and Other Income, and send a copy to the recipient of the AIP. The recipient has to include the AIP as income on their income tax and benefit return for the year they receive it. An AIP is subject to two different taxes: the regular income tax and an additional tax of 20% (12% for residents of Quebec).

Regular tax – This is the tax you calculate when you fill out your income tax and benefit return. It is based on your total taxable income.

Additional tax – You calculate this tax separately, using Form T1172, Additional Tax on Accumulated Income Payments from RESPs. Include a filled out copy of Form T1172 with your income tax and benefit return for the year you receive the AIP. You have to pay the additional tax by the balance due date for your regular tax, usually April 30 of the year that follows the year in which you received the AIP.

Reducing the amount of AIPs subject to tax – You can reduce the amount of AIPs subject to tax up to a lifetime maximum of $50,000, if you are the original subscriber, you acquired the former subscribers’ rights as a consequence of marriage breakdown or, where there is no subscriber of the plan anymore, you are or were the spouse or common-law partner of a deceased subscriber and you meet both of the following conditions:

You cannot reduce the AIPs subject to tax if you became a subscriber under the plan after the death of the original subscriber.

By claiming a deduction for a contribution to your RRSP, PRPP, or SPP, you reduce your taxable income, which reduces your regular tax. The deduction for the contribution also reduces the amount of additional tax payable by reducing the amount of AIPs subject to tax (see Form T1172). If the amount of the deduction for the contribution equals the amount of the AIPs, the taxes on the AIPs are zero.

Promoters usually have to withhold regular and additional taxes on AIPs. However, they do not have to withhold tax if both of the following apply:

Fill out Form T1171, Tax Withholding Waiver on Accumulated Income Payments from RESPs, and ask the promoter to transfer the payment directly to your RRSP, PRPP or SPP or your spouse's or common-law partner's RRSP or SPP without withholding tax.

For more information, go to Example - How AIPs are taxed.

Special rules

Changing the beneficiary

Generally, where an individual becomes a beneficiary "a new beneficiary" in place of another beneficiary "a former beneficiary" we treat the contributions for the former beneficiary as if they had been made for the new beneficiary on the date they were originally made. If the new beneficiary already has an RESP, this may create an excess contribution.

An exception to the general rule applies in certain limited situations. The exception ensures that the contribution history of the former beneficiary is not added to the contribution history of the new beneficiary in the determination of whether the new beneficiary's lifetime contribution limit has been exceeded.

Either of the following situations are exceptions:

Transferring RESP property to another RESP

Most transfers from one RESP to another RESP will have no tax implications. This is the case when the transferring RESP and the receiving RESP have the same beneficiary. There are also no tax implications when a beneficiary under the transferring RESP has a brother or sister (under 21 years of age at the time the receiving plan was entered into, unless the receiving plan is a family plan) who is a beneficiary under the receiving RESP.

In any other case, transfers can result in an excess contribution. This is because the RESP contribution history for each beneficiary under the transferring RESP is assumed by each beneficiary under the receiving RESP. We treat each contribution as if it had been made into the receiving RESP. In addition, we treat each subscriber under the transferring RESP as a subscriber under the receiving RESP. This means that they are liable for any tax on excess contribution.

A transfer of assets between individual RESPs may result in the repayment of the Canada Education Savings Grants and Canada Learning Bonds when the transfer occurs between plans held by siblings and the plan receiving the transfer amount is held by a sibling whose age exceeds 20.

Rolling over RESP property on a tax-deferred basis to an RDSP

Rollovers can be made after 2013 from an RESP to an RDSP. In general terms, a subscriber of an RESP that allows accumulated income payments and a holder of an RDSP may jointly elect in prescribed form to rollover an accumulated income payment under the RESP to the RDSP if, at the time of the election, the RESP beneficiary is also the beneficiary under the RDSP.

To qualify for an education savings rollover, the beneficiary must meet the existing age and residency requirements in relation to RDSP contributions. As well, one of the following conditions must be met:

The education savings rollover to an RDSP will not be subject to regular income tax or the additional 20% tax. The RESP promoter must send Form RC435, Rollover from a Registered Education Savings Plan to a Registered Disability Savings Plan to the RDSP issuer and keep a copy of it on file. This will satisfy the RESP promoter’s requirement to file the election with the CRA.

When an education savings rollover occurs, contributions in the RESP will be returned to the RESP subscriber on a tax-free basis. As well, CESGs and CLBs in the RESP will be required to be repaid to ESDC and the RESP terminated by the end of February of the year after the year during which the rollover is made.

An education savings rollover to an RDSP:

An education savings rollover cannot be made if the beneficiary meets one of the following:

An education savings rollover cannot be made if the RDSP holder has not provided their consent to the rollover.

Anti-Avoidance Rules for RESP

The anti-avoidance rules provide for a special tax on certain advantages that unduly exploit the tax attributes of an RESP, as well as special taxes on prohibited investments and on non-qualified investments.

Each person who is a subscriber of an RESP is jointly liable for the taxes on prohibited investments, non-qualified investments and advantages described below. Where two or more subscribers of an RESP are jointly liable to pay such a tax only one return needs to be filed on behalf of all the subscribers that are liable for the tax.

Tax payable on prohibited investments

If the RESP trust acquires a prohibited investment or if previously acquired property becomes prohibited, the investment will be subject to a special tax equal to 50% of the fair market value (FMV) of the investment, and the subscriber must file Form RC339, Individual Return for Certain Taxes for RRSPs, RRIFs, RESPs or RDSPs.

The tax is refundable in certain circumstances. For more information, see Refund of taxes paid on non-qualified or prohibited investments.

If the prohibited investment ceases to be a prohibited investment while it is held by the RESP trust, the RESP trust is considered to have disposed of and immediately re-acquired the property at its FMV.

The subscriber is also liable for the 100% advantage tax on income earned and capital gains realized on prohibited investments.

The 100% advantage tax applies to income earned, and the portion of any realized capital gain that accrued, after March 22, 2017, regardless of when the prohibited investment generating the income or gain was acquired.

Note

If an investment is both a non-qualified investment and a prohibited investment, it is treated as a prohibited investment only.

For more information, see Income Tax Folio S3–F10–C2, Prohibited Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Tax payable on non-qualified investments

If the RESP trust acquires property that is a non-qualified investment or if previously acquired property becomes non-qualified, the investment will be subject to a special tax equal to 50% of the FMV of the investment, and the subscriber must file Form RC339, Individual Return for Certain Taxes for RRSPs, RRIFs, RESPs or RDSPs, with a payment for any balance due, no later than June 30 following the end of the calendar year.

Notes

Any increase in the value of a non-qualified investment at the time of disposition is not reported on the individual’s RC339, Individual Return for Certain Taxes for RRSPs, RRIFs, RESPs or RDSPs. Income earned and capital gains realized by an RESP trust on non-qualified investments will continue to be taxable to the trust, regardless of when the investment was acquired. The Trust must file a T3RET, T3 Trust Income Tax and Information Return and is liable to pay any tax owing.

Any charges or fees that the financial institution has passed on to the annuitant as a result of the T3 Return having been filed is a matter between the annuitant and the financial institution.

If an investment is both a non-qualified investment and a prohibited investment, it is treated as a prohibited investment only and the trust is not subject to tax on the investment earnings.

The tax payable on non-qualified investments is refundable in certain circumstances. For more information, see "Refund of taxes paid on non-qualified or prohibited investments" below.

The subscriber is also liable for the 100% advantage tax on non-qualified investment income if this income is not withdrawn promptly.

For more information, see Income Tax Folio S3–F10–C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs.

Refund of taxes paid on non-qualified or prohibited investments

You may be entitled to a refund of the 50% tax on non‑qualified or prohibited investments if the investment was disposed of, or ceases to be a non-qualified or prohibited investment, before the end of the calendar year after the year in which the tax arose (or such later time as is permitted by the Minister of National Revenue).

However, no refund will be issued if it is reasonable to expect that the subscriber knew, or should have known, that the investment was or would become a non-qualified or a prohibited investment.

The refund applies to the 50% tax on non-qualified or prohibited investments but not to the 100% tax on advantages.

Note

If the 50% tax on non-qualified or prohibited investments, and the entitlement to the refund of that tax, arose in the same calendar year then a remittance of the tax is not required. For example, no remittance of tax would be required if an RESP trust acquired and disposed of a non-qualified investment in the same calendar year.

How to claim a refund

To claim a refund, you must:

The documents must contain the following:

Obligations of the RESP promoter

The promoter of an RESP must exercise the care, diligence and skill of a reasonably prudent person to minimize the possibility that a trust governed by the plan holds a non-qualified investment.

If the promoter fails to comply with this obligation, the promoter is liable to a penalty under the Income Tax Act.

The promoter will also be required to notify the subscriber of the RESP, in prescribed form and manner before March of a calendar year, if at any time in the preceding year the RESP trust acquired or disposed of a non-qualified investment, if a qualified investment became a non-qualified investment, or if a non-qualified investment became a qualified investment.

Tax treatment of RESPs

For non-qualified investments acquired after March 22, 2017 (or investments acquired before March 23, 2017, that cease to be qualified investments after March 22, 2017), the RESP trust will be subject to Part I tax on its income (including capital gains) from the investment.

In addition, an RESP’s registration would no longer become revocable as a result of the RESP trust’s acquisition after March 22, 2017, of a non-qualified investment.

Tax payable on an advantage

If the subscriber or a person not dealing at arm’s length with the subscriber (including the RESP itself) was provided with an advantage in relation to their RESP during the year, a 100% tax is payable which is:

For taxes payable on an advantage, you must file using Form RC339, Individual Return for Certain Taxes for RRSPs, RRIFs, RESPs or RDSPs.

Note

When an advantage is extended by the promoter of an RESP, the promoter, and not the subscriber, is liable for the tax. The promoter must file Form RC298, Advantage Tax Return for RRSP, TFSA, or RDSP Issuers, RESP promoters or RRIF Carriers.

For more information, see Income Tax Folio S3–F10–C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, and TFSAs.

Waiver or cancellation of tax 

We may waive or cancel all or part of the taxes if we determine it is fair to do so after reviewing all factors, including whether:

The waiver is limited to tax paid under the anti-avoidance rules and not taxes paid under any other part of the Income Tax Act.

Note

A waiver refers to penalties and interest otherwise payable by a taxpayer for which relief is granted by the CRA before these amounts are assessed or charged to the taxpayer. A cancellation refers to penalties and interest amounts that were assessed or charged to the taxpayer for which relief is granted by the CRA.

To consider your request, we need a letter that explains why the tax liability arose, why this is a reasonable error, and why it would be fair to cancel or waive all or part of the tax. Send your letter to one of the following addresses:

If your residential address is based in Ontario, Prince Edward Island, Newfoundland and Labrador, Yukon, Nunavut, Northwest Territories as well as the following cities in the province of Quebec (Montréal, Québec City, Laval, Sherbrooke, Gatineau and Longueuil); send your request to:

Canada Revenue Agency
Sudbury Tax Centre
Pension Workflow Team
Post Office Box 20000, Station A
Sudbury ON  P3A 5C1

If your residential address is based in Manitoba, Saskatchewan, Alberta, British Columbia, Nova Scotia, New Brunswick and the remaining areas in the province of Quebec not listed under the Sudbury Tax Centre; send your request to:

Canada Revenue Agency
Winnipeg Tax Centre
Pension Workflow Team
Post Office Box 14000, Station Main
Winnipeg MB  R3C 3M2

Digital services

Digital services for individuals

The CRA's digital services are fast easy, and secure!

My Account

My Account lets you view and manage your personal income tax and benefit information online. 

Use My Account throughout the year to:

For more information on how to make a payment, go to Payments to the CRA

To sign in to or register for the CRA's digital services, go to:

Receiving your CRA mail online

Set your correspondence preference to "Electronic mail" to receive email notifications when CRA mail, like your notice of assessment, is available in your account. 

For more information, go to email notifications from the CRA.

MyBenefits CRA mobile web application

Get your benefit information on the go!

Benefit recipients can access the MyBenefits CRA mobile web application throughout the year to quickly view their benefit and credit payment details, eligibility information and application status.

For more information, go to Mobile apps – Canada Revenue Agency.

Electronic payments

Make your payment using:

For more information, go to Make a payment to the Canada Revenue Agency.

Related forms and publications

Forms

Information Circular

Income Tax Folios

For more information

If you need help

If you need more information after reading this guide, go to Taxes–Canada Revenue Agency or call 1-800-959-8281.

Direct deposit

Direct deposit is a fast, convenient, and secure way to receive your CRA payments directly in your account at a financial institution in Canada. For more information and ways to enrol, go to Direct deposit – Canada Revenue Agency or contact your financial institution.

Forms and publications

The CRA encourages electronic filing of your return. If you need a paper version of the CRA's forms and publications, go to Forms and publications or call one of the following numbers:

The CRA only accepts collect calls made through telephone operators. After your call is accepted by an automated response, you may hear a beep and notice a normal connection delay

Electronic mailing lists

The CRA can send you an email when new information on a subject of interest to you is available on the website. To subscribe to the electronic mailing lists, go to Electronic mailing lists.

Tax Information Phone Service (TIPS)

For tax information by telephone, use the CRA's automated service, TIPS, by calling 1-800-267-6999.

Teletypewriter (TTY) users

If you use a use TTY for a hearing or speech impairment call 1-800-665-0354.

If you use an operator-assisted-relay service, call our regular telephone numbers instead of the TTY number.

Formal disputes (objections and appeals)

If you disagree with an assessment, determination, or decision, you have the right to file a formal dispute.

For more information about objections and formal disputes, and related deadlines, go to Objections, appeals, disputes and relief measures.

CRA Service Feedback Program 

Service complaints

 You can expect to be treated fairly under clear and established rules, and get a high level of service each time you deal with the CRA. For more information about the Taxpayer Bill of Rights, go to Taxpayer Bill of Rights.

You may provide compliments or suggestions, and if you are not satisfied with the service you received:

  1. Try to resolve the matter with the employee you have been dealing with or call the telephone number provided in the correspondence you receive from the CRA. If you do not have contact information for the CRA, go to Contact information.
  2. If you have not been able to resolve your service-related issue, you can ask to discuss the matter with the employee’s supervisor.
  3. If the problem is still not resolved, you can file a service-related complaint by filling out Form RC193, Service Feedback. For more information and to learn how to file a complaint, go to Submit service feedback.

If you are not satisfied with how the CRA has handled your service-related complaint, you can submit a complaint to the Office of the Taxpayers’ Ombudsperson.

Reprisal complaints

If you have received a response regarding a previously submitted service complaint or a formal review of a CRA decision and feel you were not treated impartially by a CRA employee, you can submit a reprisal complaint by filling out Form RC459, Reprisal Complaint.

For more information, go to Reprisal Complaints.

Due dates for individual returns

When a due date falls on a Saturday, Sunday, or public holiday recognized by the CRA, your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day.

For more information, go to Due dates and payment dates.

Cancel or waive penalties and interest

The CRA administers legislation, commonly called taxpayer relief provisions, that allows the CRA's discretion to cancel or waive penalties and interest when taxpayers cannot meet their tax obligations due to circumstances beyond their control.

The CRA’s discretion to grant relief is limited to any period that ends within 10 calendar years before the year in which a relief request is made.

For penalties, the CRA will consider your request only if it relates to a tax year or fiscal period ending in any of the 10 calendar years before the year in which you make your request. For example, your request made in 2023 must relate to a penalty for a tax year or fiscal period ending in 2013 or later.

For interest on a balance owing for any tax year or fiscal period, the CRA will consider only the amounts that accrued during the 10 calendar years before the year in which you make your request. For example, your request made in 2023 must relate to interest that accrued in 2013 or later.

Taxpayer relief requests can be made online using the CRA's My Account, My Business Account (MyBA), or Represent a Client digital services:

You can also fill out Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties and Interest, and send it with one of the following ways:

For information on the "Submit Documents online" service, go to Submit documents online.

For more details on the required supporting documents, relief from penalties and interest, and other related forms and publications, go to Cancel or waive penalties and interest.

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