ADDITIONAL TAX ADVANTAGES
In addition to the incredible power of tax-deferred income growth, RESPs offer a host of other tax advantages:
- When your child receives funds from the plan, if there is any tax to be paid at all by the student, it is only on the income earned – not on the principal;
- The earnings are paid to the student to help fund their post-secondary education. Since most students have little or no income, these payments usually attract little tax, if any; and
- At plan maturity we return the principal contribution (less plan fees) to the maturity refund recipient - usually the parents. Most parents use this money to help pay for their child's first year expenses.
GOVERNMENT GRANTS OF $7,200 OR MORE.
The government provides a Canada Education Savings Grant (CESG) up to a maximum of $7,200 per student over the life of your plan.*
Other grants are also available, including the Canada Learning Bond, the Alberta Centennial Education Savings Plan and the Quebec Education Savings Incentive.
TRANSFER OF UNUSED INCOME.
In the unlikely event your child does not use all of the money in their Plan offered by Knowledge First Financial, any unused income can be transferred to your RRSP. **
* Subject to Canada Education Savings Act (CESA).
** Subject to the Income Tax Act (Canada) (ITA). Varies by Plan Type.