Are you a B.C. resident with an RESP for your child who was born in 2006? Then August 14, 2019 is an important date you’ll want to circle on your calendar, for it’s the last day to apply for the B.C. Training and Education Savings Grant (BCTESG). Haven’t heard of the BCTESG? No problem. In this article we’ll take a closer look at this RESP grant unique to B.C. and how you can take advantage of it before the deadline.
What is the BCTESG?
The BCTESG is a program unique to B.C. The provincial grant provides a one-time lump sum payment of $1,200 to your child’s RESP. This is a lot like the Canada Education Savings Grant (CESG), but what sets it apart is that unlike the CESG, no matching contributions are required to take advantage. If you already have an RESP open for your child, you’re literally leaving free money on the table by not applying.
Your child becomes eligible for the BCTESG when they turn six years old, all the way up to the day before they reach nine years old. The program was introduced to much fanfare in 2015 where parents were given three years to apply for their children. Due to the popularity of the program, it was later extended to kids born in 2006 and that’s what this deadline relates to.
Qualifying for the BCTESG is pretty straightforward. You need to be a B.C. resident and open an RESP. For children born in 2007, 2008 and between January 1, 2009 and August 15, 2009, the deadline to apply has already passed. However, there’s still time if your child was born in 2006, but time is running out. Better act fast! You only have until August 14, 2019 to fill out an application to apply.
When applying, it’s important that you provide the necessary documentation to prove that you’re a B.C. resident. Once you child’s application is approved, the grant worth $1,200 is deposited into your child’s RESP.
Some Important Rules to Know with the BCTESG
When your child is young, post-secondary education seems like a long ways away. But it will get here sooner than you think. It may be a while since you received the grant money from the government, but it’s still important to make sure you follow the rules. I’m not trying to scare you but failing to follow the rules could result in loss of the grant money.
The BCTESG can only be used towards post-secondary education and training purposes. Once your child is enrolled in college or university, they can withdraw the BCTESG as part of an Educational Assistance Payment (EAP).
The grant is pretty flexible. It can be used at any qualifying post-secondary education or training program inside or outside Canada.
Similar to RESP contributions and other government grants, the BCTESG is able to grow tax-free within your child’s RESP. It’s only when the BCTESG is withdrawn from your child’s RESP when it’s taxed. And at this time, it’s taxed in the hands of your child, not you. If your child earns little to no income, they likely won’t have to pay much in the way of income tax.