A RESP is a trust arrangement that earns tax-free income to fund the cost of a child or grandchild’s post-secondary education. Contributions to a RESP are not deductible for tax purposes and withdrawals of capital from the RESP are not taxed. The beneficiary is taxed on the accumulated income portion when withdrawn from the RESP for the purpose of funding their post-secondary education. While at school, children tend to have relatively low sources of other income and the income is usually taxed at lower rates, or not at all, as a result.
For RESP contributions in 2024:
The Registered Disability Savings Plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit.
A non-refundable Home Accessibility Tax Credit (HATC) is also available for eligible expenses incurred in making a home more accessible to individuals aged 65 or older or to individuals who are disabled or infirm.
You may be entitled to the Child Disability Benefit (CDB) if your child is eligible for the disability tax credit. If you are already getting the CCB for your child who is eligible for the disability tax credit, you will receive the CDB automatically. Like the CCB, the CDB is a tax-free monthly payment. The program provides parents with monthly benefits of up to $264.41 ($3,173 annually) for each child who is eligible. The CDB is gradually reduced for families making over $75,537.
Tax Tips 2024
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