Comments on: Carrying Forward RESP Contributions/CESG

By: MIB

MIB — Thu, 26 Aug 2010 22:52:17 +0000

I received an extra $50 in additional CESG one year. I now want to move my bank held RESP to a broker. My bank will not transfer it to a financial instituion that does not support the additional CESG.

Thats right, they will not allow me to forgo the additional CESG ($50) in order to accomplish the transfer.

Does anyone know of any discount brokers that support the additional CESG?

By: Ed Rempel

Ed Rempel — Sat, 23 Jan 2010 02:12:36 +0000

Hi Kate,

Yes, we have run into that issue. There are actually 4 different credits – basic CESG, additional CESG, Canada Learning Bond and Alberta grant. You have to choose to have your provider apply for all 4.

Generally, the additional CESG is for families with income below $77,000 and the CLB is for families with income below about $38,000.

Some providers only carry the basic CESG because of the administrative issues. If you have received one of the other 3 grants and you transfer to a provider that does not carry those, the additional grants have to be sent back to the government.

So, it is worth asking if your provider will apply for all 4.

By: Ed Rempel

Ed Rempel — Sat, 23 Jan 2010 02:05:39 +0000

Hi Lakedweller,

You are right about the income. RBC didn’t show it right? Yes the growth and grant are taxable to the child if you withdraw for education, but the capital is not taxable.

You also have a choice on each withdrawal to decide how much of the taxable vs. non-taxable amounts to withdraw. With your child’s basic exemptions plus tuition credits, you can tax quite a bit taxable each year without having them pay any tax.

By: cannon_fodder

cannon_fodder — Tue, 19 Jan 2010 03:53:00 +0000

Lakedweller,

That is good to know. I’d imagine that you are at the leading edge of people withdrawing since they haven’t been around for 18 years. I would imagine that only a portion of parents use the RESPtoday, let alone have been using it for quite some time.

Kate – I’ve heard that certain brokerages can’t (won’t?) support the additional grant money. Maybe that is your issue.

By: cashback cards

cashback cards — Thu, 14 Jan 2010 18:47:15 +0000

This is great information, and is there a certian limit per year for these? Any and specific way of going about getting these type of accounts set up?

Thanks again for all you do!

By: Kate

Kate — Thu, 14 Jan 2010 17:00:11 +0000

When I contributed into RESP for the first year, I’ve got the regular CESG grant+additional grant. When I then opened discount brokerage account, they told me they cannot transfer money there because of that additional grant. Anybody had any experience dealing with that? Thanks.

By: AM

AM — Thu, 14 Jan 2010 16:05:44 +0000

FT,

An article on 3. Lakedwellers point would be really helpful. I dont believe Ive seen that discussed anywhere before. Cheers.

By: Lakedweller

Lakedweller — Thu, 14 Jan 2010 15:55:27 +0000

Thanks FT!
I want to take this time to remind all the RESP contributers out there about how the withdrawls are taxed when the money is used. It took me two months to convince RBC that my contributions to the RESP is not considered income to my child. The original CESG is considered income. The gorwth is considered interest earned and also taxable. So when the bank issues the tax form, make sure it is broken up properly. I hope this problem has been corrected nationally.

By: DG

DG — Thu, 14 Jan 2010 14:53:59 +0000

And if you’re not sure what your CESG limit for this year is, get your child’s SIN and call the CESG folks at 1-888-276-3624.

Dan.

By: saveING.ca This is why I signed up with ING Direct

saveING.ca This is why I signed up with ING Direct — Thu, 14 Jan 2010 13:29:35 +0000

I had no idea this RESP even existed. I will highly consider it for my children.