Are you considering going back to school full time but you’re not sure how you will pay for it? If you have savings in your RRSP, you can take advantage of the Lifelong Learning Plan.
The Lifelong Learning Plan (LLP) is a government program that allows an individual to withdraw money from their Registered Retirement Savings Plan (RRSP) to pay for post secondary education and no tax will be withheld. The funds withdrawn can be used for the individual plan owner or for their spouse or common-law partner.
In order to qualify, you must be enrolled as a full-time student in an educational program at a designated institution.
Here are some fast facts about LLP:
- You can withdraw up to $20,000.
- The maximum withdrawal per year is $10,000.
- There is no lifetime maximum. Once the previous plan has been paid back, you can withdraw more funds from your RRSP under the LLP.
- You cannot withdraw money that has been contributed within the last 89 days.
- You can use the funds to cover living expenses in addition to school expenses while attending school.
- You need to begin repaying the funds back into your RRSP in the fifth year from when the plan started or when you are no longer entitled to the education amount on your tax return for 2 consecutive years, whichever comes first.
- When repayment begins, you need to pay at least 10% of the amount withdrawn back into your RRSP. You will not be getting another tax refund on the repayment as you already received the tax deduction the first time you made your RRSP contribution.
- You have up to 10 years to repay the withdrawals.
For more information, check out this link.
1 Comment