{"id":61,"date":"2017-06-30T18:00:45","date_gmt":"2017-06-30T22:00:45","guid":{"rendered":"https:\/\/wordpress.dockhost.synology.me\/?p=61"},"modified":"2025-07-13T23:52:23","modified_gmt":"2025-07-14T03:52:23","slug":"resp-tax-implications","status":"publish","type":"post","link":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/resp-tax-implications\/","title":{"rendered":"RESP Tax Implications"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"61\" class=\"elementor elementor-61\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7efc536 e-flex e-con-boxed e-con e-parent\" data-id=\"7efc536\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-84131a2 elementor-widget elementor-widget-text-editor\" data-id=\"84131a2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>RESPs are registered accounts that permit tax-free investment growth.<\/p><p><strong>RESP contributions<\/strong> are not tax deductible when made and are not taxable when withdrawn from the plan by the subscriber.\u00a0 However, if withdrawals are made before the beneficiary enrolls in a post-secondary educational program, grants and incentives may need to be repaid to the government.<\/p><p><strong>Accumulated Interest<\/strong>, or investment growth, is not tax deductible on borrowings<a href=\"#_ftn1\" name=\"_ftnref1\"><sup>[1]<\/sup><\/a> used to contribute to an RESP.<\/p><p><strong>Government grants<\/strong> may be paid to an RESP for an eligible beneficiary. These amounts are not taxable until withdrawn from the RESP to fund the beneficiary\u2019s post-secondary education.\u00a0 Also, accumulated investment income earned on the contribution and grants is tax deferred until withdrawn for post\u2011secondary education purposes. Withdrawals of the grants and accumulated investment income for education purposes are taxable to the beneficiary.<\/p><p>Under certain conditions, the subscriber may also be able to receive the accumulated investment income on the investments and the government incentives. These payments will be taxable to the subscriber at the subscriber\u2019s marginal tax rate plus an additional 20% tax.<a href=\"#_ftn2\" name=\"_ftnref2\"><sup>[2]<\/sup><\/a> The income tax can be deferred, and the additional tax can be reduced or avoided, where up to $50,000 is transferred to an RRSP provided contribution room is available.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-20e0305 e-flex e-con-boxed e-con e-parent\" data-id=\"20e0305\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-e65952c elementor-widget elementor-widget-spacer\" data-id=\"e65952c\" data-element_type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<footer class=\"elementor-element elementor-element-a5d38b4 e-flex e-con-boxed e-con e-parent\" data-id=\"a5d38b4\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5ffa983 elementor-widget elementor-widget-text-editor\" data-id=\"5ffa983\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><a href=\"#_ftnref1\" name=\"_ftn1\"><\/a><\/p><hr \/><p><a href=\"#_ftnref1\" name=\"_ftn1\"><sup>[1]<\/sup><\/a> Borrowing to invest may not be appropriate for everyone. You should be fully aware of the risks and benefits associated with leveraged borrowing since losses, as well as gains, may be magnified.<\/p><p><a href=\"#_ftnref2\" name=\"_ftn2\"><sup>[2]<\/sup><\/a> For residents of Quebec, the additional tax is 12% federal plus 8% provincial.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/footer>\n\t\t<div class=\"elementor-element elementor-element-1e7b22ce e-flex e-con-boxed e-con e-parent\" data-id=\"1e7b22ce\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4819ea63 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"4819ea63\" data-element_type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"\/other-considerations\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Close<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>RESPs are registered accounts that permit tax-free investment growth, however, there may be tax implications on withdrawals.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[9,1],"tags":[5,6,7],"class_list":["post-61","post","type-post","status-publish","format-standard","hentry","category-ca-en","category-uncategorized","tag-english","tag-income-tax","tag-subscriber"],"_links":{"self":[{"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/posts\/61","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/comments?post=61"}],"version-history":[{"count":16,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/posts\/61\/revisions"}],"predecessor-version":[{"id":3565,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/posts\/61\/revisions\/3565"}],"wp:attachment":[{"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/media?parent=61"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/categories?post=61"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wordpress.dockhost.synology.me\/en_ca\/wp-json\/wp\/v2\/tags?post=61"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}