The Special Tax on RESP Accumulated Income Payments

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An accumulated income payment (AIP) is a payment from your registered education savings plan (RESP) that is not:

  • an educational assistance payment
  • a payment to a designated educational institution in Canada
  • a refund of contributions to the subscriber or to the beneficiary
  • a transfer to another RESP
  • repayments under a Canada Education Savings Program or a Provincial Education Savings Program

AIPs are shown in box 040 of your T4A, Statement of Pension, Retirement, Annuity and Other Income slips. Include the total of all AIPs on your income tax and benefit return. There is an additional tax on this amount.

However, the amount may be lowered or reduced to zero if all of the following conditions are met:

  • you are the original subscriber or the spouse or common-law partner of a deceased original subscriber (if there is no other subscriber)
  • you contribute, or the promoter transfers all or part of the AIPs, to your RRSP, PRPP or SPP or your spouse or common-law partner’s RRSP or SPP in the year the AIPs are received or in the first 60 days of the following year
  • you deduct all of the RRSP, PRPP or SPP contribution on your tax return in the year the payments were received

If you received an AIP from a registered education savings plan (RESP) in 2017, you may have to pay an additional tax on all or part of the amount shown in box 040 of your T4A slips.

If you would like more information on various programs, deductions and credits that can help save you money, contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.

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