A.T. Financial Newsletter
Attention parents of surly teens!
If you have a Registered Education Savings Plan (RESP) or are
thinking of opening one and your child is turning 15, 16, or
17 this year, there are some steps we may need to take to
ensure your plan qualifies to receive the Canada Education
Savings Grant (CESG).
In the year they turn 16 and 17, kids are eligible for the
CESG only if:
1. Their RESPs have received at least $2,000 in
contributions before they turned 15 (this refers to the
calendar year in which they turn 15, not the actual birthdate)
2. Their RESPs received at least $100 in contributions
in any four years before the year they turned 15.
Note that your plan does not have to meet both requirements,
only one. That said, if any portion of those minimum
contributions was withdrawn from the account, they lose
their CESG eligibility.
In other words, if you wait until your child is 16 or 17
with the intention of opening a kind of "last-minute" RESP,
the plan won't be eligible for any grant money. Otherwise,
as long as you've been contributing regularly, you should
TIPS AND TACTICS TO HELP YOU GET AHEAD
Please note that these special rules apply only to eligibility
for the Canada Education Savings Grant. They do not apply,
for example, to RESP holders in Quebec who qualify for the
Quebec Education Savings Incentive (QESI).
If you have not yet started an RESP and you have a teen
turning 15 this year, be sure to contact us soon. Your plan can
still qualify for the CESG as long as you open it and contribute
before the end of the year.
Selected for review?! Don't panic
Each year, the Canada Revenue Agency (CRA) flags selected tax returns for extra
scrutiny, in part to ensure compliance but also to educate taxpayers in areas prone
to mistakes. You can be randomly selected whether your return is submitted on
paper, electronically, or through a professional tax preparation service or
So if you receive a letter indicating your income tax return has been "selected
for review," stay calm. It's not the same as an audit. It just means your tax return
has been flagged for a more thorough investigation.
Being selected for review could lead to an audit, but as long as you can support
your claims with proper documentation, you probably don't have anything to
worry about. Even if you knowingly completed your tax return incorrectly, the Voluntary
Disclosures Program enables you to come clean, correct your return, and
not face legal consequences.
To see a list of the most common tax return mistakes (and those most likely to
lead to an adjustment), visit cra-arc.gc.ca and search for "common adjustments."
If you're preparing for a review or audit and have questions about your
investment income or any related tax slips, give us a call. For tax-planning advice
specific to your situation, please call on a qualified tax advisor.
For more information,
please contact us at