RESP Withdrawal

If no beneficiaries of an RESP attend school by age 21 and the RESP has been in place for at least 10 years, the subscriber can withdraw the plan's earnings. You have to pay tax on the earnings portion at your regular marginal tax rate plus you need to pay an additional 20% penalty tax. If you have sufficient available RRSP contribution room, you can transfer up to $50,000 of the amount withdrawn into your RRSP or a spousal RRSP. The principal can be withdrawn tax-free.

Where do you live? Alberta
Taxable income
100,000
Taxable Income
This figure is used to calculate the tax on the RESP withdrawal and any additional CESG grant based on net family income.
Annual RESP contribution
2,500
Annual RESP Contribution
There is no annual RESP contribution limit but there is a lifetime maximum limit of $50,000.
X
Input Error:
Annual RESP Contribution

You have exceeded the $50,000 maximum lifetime limit by . Enter a lower Annual RESP contribution amount, or decrease the number of contribution years.
Contribute for (years)
18
X
Input Error: Contribute for (years)
Enter a value between 1 and 31.
RESP grows for (years)
25
X
Input Error: Grows for (years)
Enter a value between 1 and 36.
Rate of return
4.00%
X
Input Error: Rate of return
Enter a value between and %.
Amount transferred to RRSP
25,000
RRSP Transfer
The maximum amount you can transfer to an RRSP is $50,000.
RESP Withdrawal Breakdown
Pay$22,101
 Tax on withdrawal$14,901
 Repay CESG$7,200
Keep$80,598
 Principal$45,000
 After-tax earnings$8,598
 Transferred to RESP$27,000
Total RESP$102,699


After-Tax Earnings
 RESP value (with CESG)$102,699
Less: Principal repaid to subscriber-$45,000
Less: CESG repaid to government-$7,200
 Equals RESP earnings$50,499
Less: Amount transferred to RRSP$27,000
 Equals Taxable earningsA$23,499
Less: Regular tax (% of taxable earnings)$10,201
Less: Penalty tax (20.00% of taxable earnings)$4,700
 Equals Total tax (% of taxable earnings)B$14,901
 After-tax earnings (% of A)(A - B)$8,598


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Assumptions
Annual RESP contributions are made at the start of each year. Calculations include the basic CESG (20%) and the additional CESG that is based on net family income. Family income is assumed to stay the same throughout the time period. Provincial grants are not included in the calculations. The maximum lifetime CESG grant you can receive is $7,200. Calculations use marginal tax rates as of January 2020.

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