Registered Disability Savings Plan (RDSP) and how it works in Canada

In Canada, the Registered Disability Savings Plan (RDSP) is a savings plan designed to help individuals with disabilities and their families save for the future. To qualify for an RDSP, the beneficiary must meet several eligibility criteria:

Eligibility for the Disability Tax Credit (DTC): The beneficiary must be eligible for the Disability Tax Credit (DTC). The DTC is a non-refundable tax credit that is intended for individuals with severe and prolonged impairments in physical or mental functions. To qualify for the DTC, an individual must have their physician fill out the Disability Tax Credit Certificate (Form T2201) and submit it to the Canada Revenue Agency (CRA) for approval.

Age: The beneficiary must be under the age of 60 to open a new RDSP account. However, once the account is established, contributions can continue until the end of the calendar year in which the beneficiary turns 59.

Residency: The beneficiary must be a Canadian resident with a valid Social Insurance Number (SIN).

Capacity: The beneficiary must be able to enter into a contract. If they lack the capacity to enter into a contract, a legal representative (guardian or other authorized individual) may open and manage the RDSP on their behalf.

It's important to note that the RDSP is intended for long-term savings, and there are rules regarding contributions, withdrawals, and government grants and bonds associated with the plan. Additionally, there are rules regarding the maximum contribution limits over the lifetime of the RDSP.

Individuals interested in opening an RDSP should consult with a financial advisor or contact the financial institution where they plan to open the RDSP for specific details and guidance based on their individual circumstances. The regulations and criteria associated with RDSPs may be subject to change, so it's advisable to check with the Canada Revenue Agency or other relevant authorities for the most up-to-date information.

Trish Van Sickle -   / trish-vansickle   [email protected] +1-519-732-6133

Nick Godfrey -   / nickgodfrey01   [email protected] +1 905-815-7186

Mehdi Rahman -   / mehdirahman   [email protected] +1 647-335-0926

For more infoirmation about the Disability Tax Credit visit https://www.benefits2.ca/