jimf

At first glance it looks like RESPs are for building up fairly small sums over a period of time - is that correct?

Is it possible say to contribute $5k or $10k in the same year that the student spends it and receive a tax break on the contribution?

Atlantic Xpat

Isn't the point of a RESP that you build up funds with smaller contributions over a longer period? i.e. open the RESP at birth, contribute monthly to have a decent pot by age 18? That's what we've done for our two (3 & 6).

I don't believe that the parent gets any tax break if you pay for tuition or expenses in the year the student is in higher education. The student does get a tax break on their tuition fees & AFAIK this can be rolled forward to when they have more income.

Aviator

RESP is a sheltered fund that the govt. contributes up to $400 a year. if you contribute $2000. If you drop in $10k they contribute more, but no the full 20%, I believe the limit is $1000. This is only if you have unused contributions.

Growth is tax sheltered. There are no tax deductions for the contributor. As has been said, most education costs are a deductible expense.

colchar

If the student doesn't need all of their education deduction they can assign it to a parent. I did this myself when in university.

Atlantic Xpat

Now that I come to think of it, Mrs AX did the same with her father.

JonboyE

Up to $5,000 can be transferred to a parent in the year it is paid. So that is worth $750 to the parent. Each province has its own transfer amount as well.

Any amount not used by the student or transferred can be carried forward by the student and used in future years.