Personal Finance

Question about max grant in a year on RESP contribution

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  • Dec 14th, 2013 3:09 pm
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[OP]
Jr. Member
Sep 1, 2011
146 posts
2 upvotes
Toronto

Question about max grant in a year on RESP contribution

As I understand one can only receive a max. CESG of $1000 in a year.
So how would it work out in my case as I had contributed $5000 in Dec 2012 and received a grant of $1000 in Jan. 2013
Am I maxed out already for 2013?
or
Can I still deposit $5000 in 2013 and be eligible to receive the grant?
or should I wait till Jan 1 to be safe?
Can someone please comment?
6 replies
Deal Fanatic
Mar 24, 2008
5613 posts
1713 upvotes
Toronto
The grant you got in January was for the money you contributed in previous year (December). You can deposit another $5000 in January and get the new CESG grant as it goes by Calendar year.
[OP]
Jr. Member
Sep 1, 2011
146 posts
2 upvotes
Toronto
ksgill wrote:
Dec 14th, 2013 9:06 am
The grant you got in January was for the money you contributed in previous year (December). You can deposit another $5000 in January and get the new CESG grant as it goes by Calendar year.
ksgill
Lovely. So I guess one can deposit $5000 in Dec. and then again in Jan. (provided there is contribution room left) and receive two grants afterwards.
Thanks a lot for the prompt and precise reply.
Much appreciated.
Deal Addict
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Dec 28, 2009
1180 posts
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luking1 wrote:
Dec 14th, 2013 9:35 am
ksgill
Lovely. So I guess one can deposit $5000 in Dec. and then again in Jan. (provided there is contribution room left) and receive two grants afterwards.
Thanks a lot for the prompt and precise reply.
Much appreciated.
Not necessarily... Only if you have back grant available. If there is none available (ex: unclaimed grant from 2010, 2009, etc) then you can only get 500 dollars in grant for 2013 by depositing 2500. Jan 1, you can deposit 2500 and get 500... Alternatively, deposit 5000 Jan 1 to get 1000 (500 from 2013 and 500 for 2014).
Deal Fanatic
Mar 24, 2008
5613 posts
1713 upvotes
Toronto
habsfan321 wrote:
Dec 14th, 2013 11:15 am
Not necessarily... Only if you have back grant available. If there is none available (ex: unclaimed grant from 2010, 2009, etc) then you can only get 500 dollars in grant for 2013 by depositing 2500. Jan 1, you can deposit 2500 and get 500... Alternatively, deposit 5000 Jan 1 to get 1000 (500 from 2013 and 500 for 2014).
Habsfan is correct, you have to have grant room available otherwise the maximum grant you can get is $500/year (on max. $2500 contribution per child). If you have two kids, you can contribute double that or $5000 to get the maximum allowed grant.
[OP]
Jr. Member
Sep 1, 2011
146 posts
2 upvotes
Toronto
habsfan321 wrote:
Dec 14th, 2013 11:15 am
Not necessarily... Only if you have back grant available. If there is none available (ex: unclaimed grant from 2010, 2009, etc) then you can only get 500 dollars in grant for 2013 by depositing 2500. Jan 1, you can deposit 2500 and get 500... Alternatively, deposit 5000 Jan 1 to get 1000 (500 from 2013 and 500 for 2014).
Yes I understand grant must be available. What I was worried was that once one loses couple of years for the grant, perhaps there is no way ever one can ever get the full grant even if making one time contribution of $50000. I guess that is so because max. grant available in one year is $1000. So if a person never contributed anything and dropped $50000 in one shot just before child turned 17, they would still get $1000 CESG only as against $7200.
Luckikly for me, I still have time to catch up but its time to jam the pedal to metal or I too will end up losing some.
Sr. Member
Oct 14, 2012
622 posts
334 upvotes
Woodstock
Actually if they hadn't contributed anything before the child turned 16 they couldn't get ANY grant. You have to open and contribute according to the following rules:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... g-eng.html
" a minimum of $2,000 of contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary before the year in which the beneficiary attains 16 years of age; or
a minimum annual contributions of at least $100 has been made to, and not withdrawn from, RESPs in respect of the beneficiary in any four years before the year in which the beneficiary attains 16 years of age.
This means that you must start to save in RESPs for your child before the end of the calendar year in which the beneficiary attains 15 years of age in order to be eligible for the CESG."

In reference to your original question, you can qualify for $1000 of CESG per child per year if you have missed years of contribution. If you last contributed in Dec 2012, you can contribute again anytime in 2013, and again anytime in 2014.

You can catch up the entire $7200 of CESG if you start double contributing when your child is about 8 or 9.

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