How is an RESP taxed (assuming the child continues education after high school)?
• Your money grows tax-free while it is in your RESP. • You don’t get a tax deduction for the money you put into an RESP. • The money that your investment earns while it is in the RESP won’t be taxed until money is taken out to pay for your child’s education. • Money paid out of the RESP as an Educational Assistance Payment is taxed in the hands of the student. Since many students have little or no other income, they can usually withdraw the money tax-free. • The money that you have put in the RESP is returned to you, tax-free. For more information, please phone the Canada Revenue Agency at 1-800-959-8281. Or visit the Educational Assistance Payments section of the Canada Revenue Agency’s Web site.
• Your money grows tax-free while it is in your RESP account. • You don’t receive a tax deduction for the money you put into an RESP. • The money that your investment earns while it is in the RESP won’t be taxed until money is taken out to pay for your child’s education. • Money paid out of the RESP as an Educational Assistance Payment is taxed in the hands of the student. Since many students have little or no other income, they can usually withdraw the money tax-free. For more information, please call the Canada Revenue Agency at 1-800-959-8281. Or visit the Educational Assistance Payments section of the Canada Revenue Agency’s Web site.
Related Questions
- How long will it take us to shift into an inclusive education system? My child will be completing high school in five years – will he experience the shift while he’s a student?
- How is an RESP taxed if a child decides not to continue education after high school?
- How is an RESP taxed (assuming the child continues education after high school)?
