RESP

RESP

Katelynn Minott, CPA & CEO profile picture
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An RESP, or Registered Education Savings Plan, is a Canadian tax-favored education savings plan used to save for a beneficiary’s post-secondary education. For U.S. expats in Canada, an RESP can create U.S. tax and reporting questions because it may hold foreign investments, receive Canadian government grants, earn income inside the plan, and qualify for only limited U.S. foreign trust reporting relief.

Why it matters for U.S. expats

RESPs are common in Canada, but they do not receive the same automatic U.S. tax treatment as Canadian tax treatment. A U.S. citizen or resident who opens, contributes to, controls, or benefits from an RESP may need to report income, disclose foreign financial assets, review FBAR and Form 8938 thresholds, check PFIC exposure, and determine whether Revenue Procedure 2020-17 removes Form 3520 and Form 3520-A reporting.

Common questions

1. What does RESP stand for?

RESP stands for Registered Education Savings Plan. It is a Canadian education savings arrangement used to help pay for a beneficiary’s education after high school.

2. Who are the main people in an RESP?

The subscriber opens the plan and makes contributions. The beneficiary is the future student. The promoter is the financial institution or plan provider that administers the RESP.

3. Are RESP contributions deductible in Canada?

No. RESP contributions are not deductible from income in Canada.

4. What is the lifetime RESP contribution limit?

For 2007 and later years, the lifetime contribution limit is CAD $50,000 per beneficiary across all RESPs for that beneficiary.

5. Does Canada tax RESP contribution withdrawals?

No. CRA says the promoter can return contributions to the subscriber tax-free, and those returned contributions are not included as income on a Canadian tax return.

6. What is an educational assistance payment?

An educational assistance payment, or EAP, is a payment from an RESP to help a beneficiary pay for post-secondary education. It can include Canada Education Savings Grant amounts, Canada Learning Bond amounts, designated provincial incentives, and investment earnings inside the plan.

7. Are RESP educational assistance payments taxable in Canada?

Yes. CRA says the student includes EAPs as income in the year received. Returned contributions are treated separately and are not included in income.

8. Is an RESP the same as a U.S. 529 plan?

No. An RESP is a Canadian plan, not a U.S. 529 plan. U.S. taxpayers should not assume RESP income, grants, or withdrawals receive the same U.S. treatment as a 529 plan.

9. Is an RESP taxable in the United States?

It can be. A U.S. citizen or resident reports worldwide income, and U.S. tax treatment depends on who owns or controls the RESP, what the plan holds, whether grants or earnings are treated as income, and whether any foreign tax credit is available.

10. Does Revenue Procedure 2020-17 exempt RESPs from Form 3520 and Form 3520-A?

It may. An RESP may qualify as a tax-favored foreign non-retirement savings trust if it meets the requirements, and an eligible U.S. individual may be relieved from Forms 3520 and 3520-A for that plan. The relief does not apply unless the taxpayer meets the income tax compliance requirements.

11. Does Revenue Procedure 2020-17 remove Form 8938 or FBAR reporting?

No. Revenue Procedure 2020-17 does not remove Form 8938, FBAR, or other U.S. reporting obligations.

12. Does an RESP need to be reported on FBAR?

It can. If the RESP is treated as a foreign financial account and the taxpayer has a reportable financial interest or signature authority, it may need to be included when the aggregate FBAR threshold is met.

13. Does Form 8938 apply to an RESP?

It can. An RESP may be a specified foreign financial asset if the taxpayer has an interest in the plan and the Form 8938 filing threshold is met.

14. Can RESP investments create PFIC reporting?

Yes. If the RESP holds Canadian mutual funds, ETFs, or similar pooled foreign investments, PFIC rules and Form 8621 may need to be reviewed.

15. What happens if an RESP is not used for education?

Canada has separate rules for accumulated income payments, returned contributions, grant repayments, transfers, and rollovers. U.S. taxpayers should also review U.S. income tax, foreign trust, FBAR, FATCA, and PFIC treatment before closing or withdrawing from the plan.

16. What records should U.S. expats keep for an RESP?

Keep plan documents, subscriber and beneficiary details, annual statements, contribution history, grant records, Canada Learning Bond records, investment holdings, distribution records, EAP slips, exchange-rate calculations, FBAR and Form 8938 support, and any U.S. tax analysis for Forms 3520, 3520-A, or 8621.

When to get help

Professional guidance is important when:

  • You are a U.S. citizen or resident and have opened, funded, or controlled an RESP.
  • Your child has an RESP and you are unsure who must report it.
  • The RESP holds Canadian mutual funds, ETFs, or other pooled investments.
  • You received Canadian grants, bonds, investment income, educational assistance payments, or accumulated income payments.
  • You are unsure whether Revenue Procedure 2020-17 applies.
  • You need to determine whether FBAR, Form 8938, Form 8621, Form 3520, or Form 3520-A applies.
  • You are closing, transferring, or withdrawing funds from an RESP.

Bright!Tax can review the RESP structure, identify U.S. reporting requirements, and coordinate RESP income, FBAR, FATCA, PFIC, and foreign trust issues with the rest of your expat tax return. Get started with Bright!Tax.

Official sources

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

July 2026

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