You will be able to make contributions for a beneficiary only if either:
- the beneficiary's social insurance number (SIN) is given to the promoter before the contribution is made and the beneficiary is a resident of Canada
- the contribution is made by way of a transfer from another RESP under which the individual was a beneficiary immediately before the transfer
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 on your Income Tax and Benefit Return. In addition, you cannot deduct the interest you paid on money you borrowed to contribute to an RESP.
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 Program (CESP) or any Provincial Education Savings Programs when determining whether a beneficiary has an excess contribution.
Each subscriber for that beneficiary is liable to pay a 1% per-month tax on his or her share of the excess contribution that is not withdrawn by the end of the month.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 An excess contribution exists until it is withdrawn.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 Contribution.
Waiver 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
- why it would be fair to cancel or waive all or part of the tax.
Send your letter to following address:
Registered Plans Directorate
Canada Revenue Agency
Ottawa ON K1A 0L5
There are limits on the amounts that can be contributed to all RESPs for a beneficiary.
For each beneficiary, the annual limit is:
- for 1996 is $2,000
- for 1997 to 2006 is $4,000
- for 2007 and subsequent years, there is no limit
For each beneficiary, the lifetime limit is:
- for 1996 to 2006 is $42,000
- for 2007 and subsequent years is $50,000
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 - Tax on excess contributions
In 2010, Hugh established an RESP for his son Allan and contributed a total of $32,000 to it prior to 2020. Allan’s grandmother, Cathy, also opened an RESP for Allan in 2010, and prior to 2021, 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 2021, 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 2021 and at the end of January 2021, 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 2021 $32,000 $16,000 Plus contribution in January 2021 $1,000 $500 Plus contribution in July 2021 $500 $500 Minus withdrawal in December 2021 ($500) 0 Total share of the lifetime contributions $33,500 $17,000
The lifetime excess contributions for 2021 is calculated as follows:
Hugh's lifetime contributions for Allan before 2021
Cathy's lifetime contributions for Allan before 2021
Total contributions to an RESP for Allan before 2021
Maximum lifetime limit remaining (50,000 − 48,000)
Total of contributions made in 2021 for Allan
Hugh's share of the lifetime excess contributions for 2021 was $300. This was determined by multiplying his proportion of the total contributions made to both RESPs in 2021 ($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 2021 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 2021 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 2021, neither Cathy nor Hugh must pay any tax on the excess contribution in December.
Report a problem or mistake on this page
- Date modified: