How to use this page: Read the simplified explanation first, then use the official links below before acting.
Plain-language summary
- For beneficiaries in 2007 and later years, there is no annual RESP contribution cap, but the lifetime contribution cap across all RESPs for one beneficiary is $50,000.
- Government grants and provincial incentives do not count toward that $50,000 limit, but personal contributions from every subscriber do count.
- If the combined contributions go over the limit at the end of a month, each subscriber may owe 1% tax per month on their share of the excess until it is withdrawn.
Action steps
- Add up total personal contributions across every RESP for the same child before making a new deposit.
- If the total is already over $50,000, ask the promoter to withdraw the excess contribution as soon as possible.
- Use CRA Form T1E-OVP to calculate and report any tax owing on your share of the excess contribution.
- If the over-contribution happened because of a reasonable error, send CRA a letter asking for a waiver or cancellation of some or all of the tax.
Caveats to watch
- Withdrawing the excess stops future monthly tax, but the withdrawn amount still counts as a contribution when CRA tests the lifetime limit.
- Two families can accidentally over-contribute when parents, grandparents, or separated households each use different RESP providers for the same beneficiary.
- RESP contributions are not tax-deductible, and interest on money borrowed to make RESP contributions is not deductible.
- CRA says a beneficiary usually needs a SIN and Canadian residency before a regular contribution is made, unless the amount arrives by transfer from another RESP.
Examples
Example: two subscribers go over the lifetime cap
A parent and grandparent already contributed a combined $48,000 for one child. They then add another $2,500 in the same year, pushing the total to $50,500. The excess is $500. CRA's example shows each subscriber pays 1% per month on their own share of that $500 until the excess is removed.
Example: grants do not cause the over-contribution
If a family contributes $49,800 and the RESP also receives CESG or a provincial incentive, the grants themselves do not push the account over the $50,000 contribution cap. The problem starts only if personal contributions later rise above $50,000.
What this means in real life
- The risk is usually coordination, not an annual contribution ceiling.
- The simplest control is one shared running total for the beneficiary, regardless of provider.
- If more than one adult contributes, agree on who tracks the remaining lifetime room before anyone sends more money.