Originally Posted by
Masked Bandit
So what's the point of going max total vs. max grant money? You can't deduct contributions so if I'm paying over the top of the maximum grant contributions threshold ($36,000) I don't see the benefit. That extra $14K is paid with after tax dollars whether I dump it in my kid's RESP or leave it in my own taxable brokerage account. If it comes out of the RESP my kid has to claim it as income so in essence it's double taxed, once when I earned it and then again when my kid spends it. What am I missing here?
Only accumulated income and grant money is taxed. Your after tax contributions aren’t taxed when they are withdrawn.
Think of the accumulated income as a form of income splitting with your child, as the growth will be taxed in your child’s hands, who in theory, would be in a lower marginal tax rate than the parents.
These opinions are entirely my own and do not represent any other person or organization.