In 2010, Hugh established an RESP for his son Allan and contributed a total of $32,000 to it prior to 2020. Allan’s grandmother, Cathy, also opened an RESP for Allan in 2010, and prior to 2021, contributed $16,000 to it. None of the prior year contributions made by Hugh and Cathy exceeded the annual or lifetime limits that were applicable in those prior years.

In January 2021, Hugh contributed $1,000 and Cathy contributed $500 to their respective RESPs and in July, both Hugh and Cathy contributed an additional $500. Hugh subsequently withdrew $500 in December.

The lifetime limit on all contributions that can be made to all RESPs for Allan is $50,000. Together Hugh and Cathy had contributed $48,000 to RESPs for Allan before 2021 and at the end of January 2021, the total contributions were $49,500 which was still within the lifetime limit for contributions to RESPs for Allan. However, at the end of July the total contributions were $50,500 and the lifetime limit was exceeded by $500.

The lifetime excess contributions for 2021 is calculated as follows:

Hugh's share of the lifetime excess contributions for 2021 was $300. This was determined by multiplying his proportion of the total contributions made to both RESPs in 2021 ($1,500 ÷ $2,500) by the excess ($500) or ($1,500 ÷ $2,500 × $500). Similarly, Cathy's share was $200 ($1,000 ÷ $2,500 × $500).

Hugh's tax payable for 2021 is calculated as follows:
Hugh's tax on his share of the excess contribution is calculated for each month the excess contribution remains in the RESP. For July to November, Hugh's tax is $300 × 1% × 5 months or $15.00.

Cathy's tax payable for 2021 is calculated as follows:
Cathy's tax on her share of the excess contribution is calculated for each month the excess contribution remains in the RESP. For July to November, Cathy's tax is $200 × 1% × 5 months or $10.00. Because Hugh withdrew the excess amount in December 2021, neither Cathy nor Hugh must pay any tax on the excess contribution in December.