TLDR: The RESP deadline for the tax year 2022 was December 31, 2022. The deadline for the current tax year 2023 is December 31, 2023. It’s not too late to start now, unless your youngest child turns 18 this year. Reminder: the plan must be closed by the time the youngest child turns 31.
Are you a Canadian parent or guardian looking to start saving for your child’s post-secondary education? If so, you may have heard of the Registered Education Savings Plan (RESP). But what exactly is an RESP and when is the deadline for contribution?
What Is A RESP?
First things first, let’s define what an RESP is. An RESP is a type of savings plan that is specifically designed to help parents, guardians, and other family members save for a child’s post-secondary education. The Canadian government even offers a grant called the Canada Education Savings Grant (CESG) to help boost RESP savings. This grant is paid directly into the RESP account and provides between 20% and 40% of the first $2,500 per year.
So, when is the deadline for contribution to an RESP? Well, there isn’t really a hard and fast deadline for contribution to an RESP. The plan stays open until the beneficiary reaches the age of 31. At that point the plan must be closed.
However, it’s important to note that the CESG is only available until the end of the calendar year in which the beneficiary turns 17. This means that if you want to take advantage of the CESG, you’ll need to open an RESP and make at least one contribution before the end of the calendar year in which your child turns 17.
What Is The Contribution Limit On A RESP?
Now, you might be wondering how much you need to contribute to an RESP in order to receive the CESG. The good news is that there is no minimum contribution required to open an RESP and receive the CESG. However, you must make at least one contribution of any amount to the RESP before the end of the calendar year in which the beneficiary turns 17 in order to receive the CESG.
It’s also worth noting that there is a lifetime limit on the CESG. The maximum CESG that can be received is $7,200 per beneficiary. This means that if you are planning to make regular contributions to your child’s RESP, it’s important to do so as early as possible in order to maximize the amount of CESG that you can receive.
How Can I Open A RESP In Canada?
Now that we’ve covered the basics of the RESP deadline and the CESG, you might be wondering how to actually go about opening an RESP and making contributions. The process is actually quite simple.
First, you’ll need to choose a financial institution or promoter to administer your RESP. There are many different options to choose from, so it’s important to do your research and find a provider that meets your needs. The brokerage firms, including the free ones, typically have an option to invest your RESP and they’re our favorite.
Next, you’ll need to open an account and provide some basic information about yourself and the beneficiary. This will typically include things like your name, address, and social insurance number, as well as the beneficiary’s name and date of birth.
Once your account is set up, you can start making contributions to the RESP. Contributions can be made in a variety of ways, including lump sum payments or regular contributions through automatic bank drafts. It’s important to remember that the CESG is only available on the first $2,500 of annual contributions, so it’s generally best to plan in advance and spread your contributions out over the years rather than making a single large contribution.
Finally, it’s worth noting that the money in an RESP can be used to pay for a wide range of post-secondary education expenses, including tuition, books, and even rent for students who are living away from home.
The Bottom Line
Bottom line, the RESP deadline for contributions is December 31 of every year, and the latest for the last yearly contribution is the end of the calendar year in which the beneficiary turns 17. This is the last opportunity to take advantage of the CESG, so it’s important to open an RESP and make at least one contribution before this deadline. However, the RESP account itself stays open until the beneficiary reaches the age of 31.
There is no minimum contribution required to open an RESP and receive the CESG. You need one contribution of any amount before the end of the calendar year in which the beneficiary turns 17. The CESG has a lifetime limit of $7,200 per beneficiary. It’s important to start contributing to the RESP as early as possible in order to maximize the amount of grant money received.
Opening an RESP and making contributions is simple, just choose a financial institution or promoter to administer the account, provide some basic information about yourself and the beneficiary, and start making contributions. The money in the RESP can be used to pay for a wide range of post-secondary education expenses, including tuition, books, and rent for students who are living away from home.
By starting to save for your child’s post-secondary education early on, you can take advantage of the CESG and give your child the best possible start on their education. Don’t let the RESP deadline pass you by – start planning for your child’s future today!
