OT-RESP grants

[SplashMountainMama]

Did anyone else get notice about grants for RESP for their kids born after 2003? If we already receive Child Tax Credit does it mean they will give you $$ for an RESP even if you don't contribute anything? I was confused by the pamphlet that came with it.

 

[FirstTimeDisneyDad]

I got it too.

Not sure that it is anything different then what it already offered - although I recall there being some different percentages. I'm pretty sure that you have to contribute - it wouldn't be free money and woudln't have anything to do with the Tax Credit, activity tax credit, $100 /month for kids under 6 (forget what they cal this plan), baby bonus or anything else...

Currenly, I receive 20% on all deposits made into our RESP (subject to the limits of course), so the principle isn't new.

I'm going to go back and read it again, but I am sure some online research should be englightening.

Let us know what you find out?

 

[misslissa]

I don't know about that...

But, my parents got me an RESP and I got them money while I was in college. I got taxed very hard every year It was difficult... so, put a little money aside to pay your kids' taxes too!

 

[MikeyNS]

Shouldn't the tuition amount be tax deductible for that year anyways, minimizing most, if not all, of the tax? *crosses fingers*
Unless you had a decent income during the school year!

 

[misslissa]

That is possible... but I went to school on a scholarship, I had no income. So, it was hard at that time for me. But, I loved having the RESPs!!!!!!! I never even thought about the tuition deductions...

 

[laura001]

Our two oldest children are in University, we bought RESP's when they were first born. Their first year amount was substantial (if I remember correctly, the cheques were made out to us), each year after that the cheques made out to the student. After the first year, they have received approx. $5000.00 per year and not once have they had to pay extra tax (yes, they work summer jobs too), by the time their tuition, rent etc. comes off.....both receive a refund of at least 1000.00 per year.

 

[dancin Disney style]

My oldest will be attending college this fall and I had a meeting with the bank about how the RESP money is dispersed. They told me to bring them the tuition bill and they would pay it from the account. They didn't mention anything about having to pay tax on the money.

 

[misslissa]

My oldest will be attending college this fall and I had a meeting with the bank about how the RESP money is dispersed. They told me to bring them the tuition bill and they would pay it from the account. They didn't mention anything about having to pay tax on the money.

Everything that you get from an RESP is taxable except for your initial investment. It is the same on any kind of investment really... just like income. However, if your child can claim the amount that they are spending on tuition usually it balances out. Some people also have rent or taxes that they have paid because of a part time job which means that they get money back still at tax time. Personally, I got an RESP and a scholarship so I didn't pay tuition. I lived at home... so, I got taxed like crazy!!!!! But, it was far better to have the RESP... that taxes were tiny compared to the benefits of having it.