Are RESP Contributions Tax Deductible?

Are RESP contributions tax deductible?

No. RESP contributions are made with after-tax dollars and are not tax-deductible and do not create a tax credit on your Canadian return.

RESPs are still widely used because investment growth can compound inside the plan without annual tax, and government incentives can add meaningful value over time.

How RESP taxes work

• Contributions: Not deductible when you contribute, and generally not taxed when withdrawn.
• Growth and grants: Investment earnings and government grants are usually paid out as Educational Assistance Payments (EAPs) when the student is in eligible post-secondary education.
• Who pays the tax: EAPs are generally taxed to the student, often on a T4A, which can mean little or no net tax if their income is low.

Key RESP limits and incentives for 2026

• Lifetime contribution limit: $50,000 per beneficiary.
• CESG: Usually 20% on the first $2,500 contributed per year, up to $500 annually and $7,200 lifetime per beneficiary.
• CLB: Available to eligible lower-income families, up to $2,000 lifetime.

If the child does not go to post-secondary

• Your contributions can usually be withdrawn tax-free.
• Government grants generally have to be repaid if they are not used for eligible education.
• Investment earnings may be taxable to the subscriber and may face additional tax, although an RRSP transfer of accumulated income may be possible in some cases if you meet the rules and have room.
• Depending on the plan type and family situation, changing the beneficiary may also be an option.