What are the Benefits?
Tax Deferral: Income earned on the contributions that you make to the plan is not subject to
tax until it is withdrawn from the plan.
Income Splitting:
When amounts are paid out of the plan to the beneficiary for post-secondary education, the beneficiary is taxed on the income earned in the plan, not the contri-butor. The beneficiaries tax rate is typically lower than the contributors tax rate.
Incentive Grants:
The government will match your contri-butions with 20% grants paid to the plan on contributions of up to $2,000 per year.
Starting in 2005, you may be eligible to receive an additional grant depending on your family income. If your child was born in 2004 or later, you may be eligible to a Canada Learning Bond payment into the RESP if you receive a National Child Benefit supplement for that child.
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