Dual citizens and Educational Savings Plans

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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dualblues
Posts: 23
Joined: Tue Mar 16, 2021 1:50 am

Dual citizens and Educational Savings Plans

Post by dualblues »

Thanks for your help!

I am dual citizen preparing to becoming a Canadian resident. It would be possible for me to make. use of US educational savings plans and Canadian ones as well (after my return). However, based on my research, these plans provide little benefit (because they are not recognized in treaty..etc).

Are there any opportunities for US persons residing in Canada to benefit from education savings plans? Alternatively, are there other approaches to saving for their kids education? (Is the best that can be done to buy and hold an index fund?)

Cheers!
CdnAmerican
Posts: 238
Joined: Tue Aug 30, 2011 12:15 am

Re: Dual citizens and Educational Savings Plans

Post by CdnAmerican »

Hi Dualblues - There is lots of info around on this forum. The RESP is a little tricky in Canada; you have to claim your gains on it on your US taxes, so depending on your tax situation you may or may not get a ton of benefit from it. It seems to depend on how much your overall income is, and if you can cover any RESP gains with the standard deduction or other means. We have used the RESP with success, but it is a bit of a hassle & it's good to look into it for your own situation. You can also get a cross-border accountant who can help decide if it's best for you. Good luck!
Not a professional opinion.
Madiaon2000
Posts: 2
Joined: Fri Apr 02, 2021 10:16 pm

Re: Dual citizens and Educational Savings Plans

Post by Madiaon2000 »

Thank you for your help! CdnAmerican.

I am university student without any earned income. I have RESP EAP (educational assistance payment) and Canada Emergency Student Benefit. the standard deduction can cover all of my unearned income.

The question is where I report the EAP (educational assistance payment in form 1040? I can report Canada Emergency Student Benefit in Form 1040 schedule 1 Line 8 as other income. Can I report RESP EAP (educational assistance payment) in Form 1040 schedule 1 Line 8 as other income as well (indicate as educational assistance payment) ?

Any help is appreciated!
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