[37] Bill 4 As Amended by Standing Committee (PDF)
Bill 4 2001
An Act to amend
the Income Tax Act to provide
a tax credit for contributions
to registered education
savings plans
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
1. Section 8 of the Income Tax Act, as amended by the Statutes of Ontario, 1992, chapter 18, section 55, 1992, chapter 25, section 3, 1993, chapter 29, section 6, 1994, chapter 17, section 99, 1996, chapter 1, Schedule C, section 8, 1996, chapter 24, section 13, 1996, chapter 29, section 9, 1997, chapter 19, section 9, 1997, chapter 43, Schedule B, section 4, 1998, chapter 5, section 3, 1998, chapter 9, section 81, 1998, chapter 34, section 69, 1999, chapter 9, section 120 and 2000, chapter 42, section 55, is further amended by adding the following subsections:
Definitions
(9.4) In this subsection and in subsections (9.5) to (9.9),
"beneficiary" means a person designated by an individual, to whom or on whose behalf an educational assistance payment is agreed to be paid if the person qualifies under the RESP; ("bénéficiaire")
"educational assistance payment" means any amount, other than a refund of payments, paid or payable under a RESP to or for a beneficiary to assist him or her to further his or her education at the post-secondary school level; ("paiement d'aide aux études")
"eligible post-secondary educational institution" means an educational institution located in Ontario designated as an eligible institution under subsection 1 (1) of Regulation 774 of the Revised Regulations of Ontario, 1990 under the Ministry of Training, Colleges and Universities Act; ("établissement d'enseignement postsecondaire admissible")
"qualifying contribution" means a contribution not exceeding the RESP annual limit under subsection 146.1 (1) of the Income Tax Act (Canada) made by an individual to a RESP in respect of which a receipt in the form approved by the Provincial Minister has been issued by the trustee of the RESP setting out the amount and the date of the contribution; ("cotisation autorisée")
"RESP" means an education savings plan accepted for registration under the Income Tax Act (Canada); ("REÉÉ")
"trustee" means a trustee of a trust governed by a RESP. ("fiduciaire")
Registered education savings plan
tax credit
(9.5) An individual who is a resident of Ontario on December 31 of a taxation year and who contributes to a RESP in that taxation year may deduct from the amount of tax otherwise payable under this Act an amount not exceeding the amount determined under subsection (9.6) if the following conditions are met:
1. His or her adjusted income for that taxation year is less than,
i. $40,000 if he or she does not reside with any person who is his or her cohabiting spouse, or
ii. $80,000 if he or she does reside with any person who is his or her cohabiting spouse.
2. The beneficiary of the RESP is a resident of Ontario and is less than 18 years of age at the end of that taxation year.
3. The individual and the beneficiary have social insurance numbers.
4. No educational assistance payments have been made in that taxation year or in the two prior taxation years.
Amount
(9.6) The amount of the RESP tax credit for a taxation year is the lesser of,
(a) the amount of tax payable before the deduction of any amounts to which the taxpayer is entitled under subsection (3), (3.1), (4), (8.1), (9), (15), (15.1) or (15.3); and
(b) 20 per cent of a qualifying contribution or $200 per
beneficiary.
Application
(9.7) Despite subsection (9.5), no RESP tax credit may be claimed for a taxation year that commences on or before the end of the calendar year in which subsection (9.5) comes into force.
Supporting documentation
(9.8) An individual who claims a deduction under subsection (9.5) shall, in the annual return for the taxation year in which the individual claims the deduction, file the receipt issued by the trustee.
Recovery of amount
(9.9) If the beneficiary does not attend an eligible post-secondary educational institution before the registration of the education savings plan is revoked under the Income Tax Act (Canada), the total of all tax credits allowed to an individual under subsection (9.5) shall constitute a debt due and owing to the Crown in right of Ontario and may be recovered as if it were tax payable under this Act for the taxation year of the individual in which the beneficiary attends an ineligible post-secondary educational institution or the registration is revoked.
Commencement
2. This Act comes into force on the day it receives Royal Assent.
Short title
3. The short title of this Act is the Saving for Our Children's Future Act (Income Tax Amendment), 2001.
EXPLANATORY NOTE
The Bill establishes a tax credit for any individual who contributes to a registered education savings plan in the amount of 20 per cent of the qualifying contribution to a maximum of $200 per beneficiary per year. The credit is limited to individuals with incomes of less than $40,000 per year or families with incomes of less than $80,000 per year. The bill provides that the credit will be a debt due to the Crown and recoverable as if it were income tax if the beneficiary does not pursue post-secondary education in Ontario.