Lifelong Learning Plan (LLP)

Includes Form RC96

RC4112(E) Rev. 14

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La version française de ce guide est intitulée Régime d’encouragement à l’éducation permanente (REEP).

Is this guide for you?

Use this guide if you want information about participating in the Lifelong Learning Plan (LLP).

The LLP allows you to withdraw amounts from your registered retirement savings plans (RRSPs) to finance training or education for you or your spouse or common-law partner. You do not have to include the withdrawn amounts in your income, and the RRSP issuer will not withhold tax on these amounts.

Over your repayment period (generally 10 years), you have to repay to your RRSPs the amounts you withdrew under the LLP. Any amount that you do not repay when due will be included in your income for the year it was due.

The definitions section gives general explanations of the terms we use. Chapter 1 gives information on how the LLP works. Chapter 2 explains how to repay withdrawals under the LLP.

Definitions

These definitions provide a general explanation of the terms that we use in this guide.

Common-law partner – a person who is not your spouse (see the definition of spouse), with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

  1. has been living with you in a conjugal relationship and this current relationship has lasted at least 12 continuous months;
  2. is the parent of your child by birth or adoption; or
  3. has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.

Note

In this definition, “12 continuous months” includes any period you were separated for less than 90 days because of a breakdown in the relationship.

LLP balance – your LLP balance, at any time, is the total of all eligible amounts you have withdrawn from your RRSPs under the LLP, minus the total of all amounts you have repaid to your RRSPs or included in your income.

LLP student – this is the individual whose education you are financing under the LLP. It can be you or your spouse or common-law partner, but not your child or the child of your spouse or common-law partner. You have to participate in the LLP for the same LLP student each year until the year after you have reduced your LLP balance to zero.

LLP withdrawal – this is an amount you withdraw from your RRSPs under the LLP.

Participation period – your LLP participation period starts on January 1 of the year you make an eligible withdrawal from your RRSP and ends in the year your LLP balance is zero.

Pooled registered pension plan (PRPP) – a retirement savings plan to which you and a participating employer can contribute. Any income earned in the PRPP is usually exempt from tax as long as it remains in the plan.

Repayment period – the repayment period starts in the second, third, fourth, or fifth year after the year of the first withdrawal and ends when the LLP balance is zero.

RRSP deduction limit – the maximum amount you can deduct from contributions you made to your RRSPs or to your spouse’s or common-law partner’s RRSP for a year (excluding transfers to your RRSPs of certain types of qualifying income). The calculation is based, in part, on your earned income in the previous year. PAs, PSPAs, PARs, and your unused RRSP deduction room at the end of the previous year are also used to calculate the limit.

RRSP owner (also called annuitant) – this is the individual named in the RRSP contract as the one who will receive the RRSP money at maturity.

Specified pension plan (SPP) – a pension plan or similar arrangement that has been prescribed under the Income Tax Regulations as a “specified pension plan” for purposes of the Income Tax Act (currently the Saskatchewan Pension Plan is the only arrangement prescribed to be a specified pension plan. Many of the rules related to RRSPs also apply to SPPs.

Spouse – a person to whom you are legally married.


Chapter 1 – Participating in the LLP

The Lifelong Learning Plan (LLP) allows you to withdraw up to $10,000 in a calendar year from your registered retirement savings plans (RRSPs) to finance full-time training or education for you, or your spouse or common-law partner. You cannot participate in the LLP to finance your children's training or education, or the training or education of your spouse's or common-law partner's children. As long as you meet the LLP conditions every year, you can withdraw amounts from your RRSPs until January of the fourth calendar year after the year you made your first LLP withdrawal. You cannot withdraw more than $20,000 in total.

You do not have to include the withdrawn amounts in your income, and the RRSP issuer will not withhold tax on these amounts. You have to repay these withdrawals to your RRSPs generally within 10 years. Any amount that you do not repay when it is due will be included in your income for the year it was due. This chapter explains the conditions that you and the LLP student have to meet to participate in the LLP, and how to make an LLP withdrawal. The information below summarizes the LLP withdrawal process.

The following are conditions to meet:

  • you have an RRSP;
  • you are a Canadian resident; and
  • the LLP student is enrolled (or has received an offer to enrol before March of the next year):
    • as a full-time student;
    • at a designated educational institution; an
    • in a qualifying educational program.
  • If you have made an LLP withdrawal in a previous year, your repayment period has not begun.

All four conditions must be met. However, if the LLP student meets one of the disability conditions (see Who can be enrolled on a part-time basis?), he or she can be enrolled on a part-time basis.

Complete Form RC96, Lifelong Learning Plan (LLP) Request to Withdraw Funds from an RRSP and give it to your RRSP issuer.

You can withdraw up to $10,000 in a calendar year and up to $20,000 in total. The LLP student has to enrol before March of the year after the LLP withdrawal and still be enrolled in that program in April of the year after the LLP withdrawal, unless the student has already completed the program by then.

The RRSP issuer will withhold tax at source on the part of the withdrawal that exceeds the $10,000 limit for the year. The RRSP issuer will send you a T4RSP slip showing the amount you withdrew under the LLP. You must file a tax return and complete Schedule 7 to report all LLP withdrawals made in the tax year.

Note

If the student leaves the educational program before April of the year after the LLP withdrawal, see What happens if the LLP student leaves the educational program?

Who can participate in the LLP?

If you are an RRSP owner and a resident of Canada, you can usually participate in the LLP to withdraw funds from your RRSPs for your own or your spouse's or common-law partner's education.

Certain types of RRSPs, such as locked-in RRSPs, do not allow you to withdraw funds from them. Your RRSP issuer can give you more information about the types of RRSPs that you have.

Note

Similar to locked-in RRSPs, pooled registered pension plans (PRPPs) do not allow for LLP withdrawals. However, you can designate your PRPP contribution as an LLP repayment.

You cannot participate in the LLP after the end of the year you turn 71. For more information, see Your options in the year you
turn 71
.

You have to be a resident of Canada when you receive funds from your RRSPs under the LLP. If you are not sure whether you are considered a resident or non-resident of Canada, or if you need more information about residency status, go to Canada Revenue Agency, or call the International Enquiries for Individuals and Trusts at one of the following numbers: 1-800-959-8281 (toll free within Canada and the Continental U.S.), or 1-613-940-8495 (from outside Canada and the Continental U.S. - we accept collect calls by automated response. Please note that you may hear a beep and experience a normal connection delay).

If you become a non-resident after you make an LLP withdrawal, see If you become a non-resident of Canada.

What conditions does the LLP student have to meet?

The LLP student can be you, or your spouse or common-law partner. You cannot name your child or the child of your spouse or common-law partner as an LLP student.

The LLP student must enrol on a full time basis in a qualifying educational program at a designated educational institution.

If the LLP student meets the disability conditions, the student can enrol on a part-time basis (see Who can be enrolled on a part-time basis?). If you are not sure whether the LLP student is enrolled on a full-time basis, check with the educational institution.

The educational institution determines when the student is considered to be enrolled in a program, and when the student is no longer enrolled. Usually, the student is considered to be enrolled when part or all of his or her fees are paid.

If the LLP student is not already enrolled in a program, the student must have received a written offer from a designated educational institute to enrol before March of the year after you withdraw funds from your RRSPs. A conditional written offer is acceptable.

If you made an LLP withdrawal in a previous year, your repayment period has not begun.

You cannot participate in the LLP if the student has already completed the program and is no longer enrolled.

What is a qualifying educational program?

A qualifying educational program is an educational program offered at a designated educational institution. Where an educational institution, other than one certified by Employment and Social Development Canada (ESDC), offers the educational program, the program must be at a post-secondary school level. All programs must meet the following conditions:

  • last three consecutive months or more; and
  • require a student to spend 10 hours or more per week on courses or work in the program. Courses or work includes lectures, practical training, and laboratory work, as well as research time spent on a post-graduate thesis. It does not include study time.

What is a designated educational institution?

A designated educational institution is a university, college, or other educational institution that qualifies for purposes of the education amount on line 322 of Schedule 11 of your income tax and benefit return. If you are not sure whether a particular institution qualifies as a designated educational institution, see Pamphlet P105, Students and Income Tax, or call 1-800-959-8281.

Who is a full-time student?

The educational institution determines who is a full-time or part-time student. The requirement that the student enrol as a full-time student is separate from the qualifying educational program requirement. The qualifying educational program requirement can be met by a person taking courses by correspondence or by a person enrolled in a distance education program. Even if the student is enrolled in a program that requires spending 10 hours or more per week on courses or work in the program, the institution may consider the student to be enrolled on a part-time basis. If this is the case, you cannot participate in the LLP. The following section explains the only exception to this rule.

Who can be enrolled on a part-time basis?

An LLP student who meets one of the disability conditions can be enrolled on a part-time basis. The program in which the student is enrolled must still be a qualifying educational program that usually requires a student to spend 10 hours or more per week on courses or work in the program. However, a student who meets the disability conditions can spend less than 10 hours per week on courses or work in the program.

We consider the LLP student to meet the disability conditions if one of the following situations applies:

  • the student cannot reasonably be expected to be enrolled as a full-time student because of a mental or physical impairment,and the student has submitted a signed letter from  a medical doctor, an optometrist, a speech-language pathologist, an audiologist, an occupational therapist, a physiotherapist, or a psychologist stating this; or
  • the student is entitled to the disability amount on line 316 of the student's income tax and benefit return for the year of the LLP withdrawal.

    Note
    If the student was allowed the disability amount on his or her income tax and benefit return for the previous year and still meets the eligibility requirements for the disability amount, the student will meet the disability condition for the LLP. The student will also meet this condition if someone else claimed the disability amount for the student in the previous year and the student still meets the eligibility requirements for the disability amount. If you have questions about the disability amount, call 1-800-959-8281.

What happens if the LLP student does not enrol in the program in time?

If the LLP student is not already enrolled when you make the withdrawal, the student has to enrol in a qualifying educational program before March of the year after you made the LLP withdrawal.

If the LLP student does not enrol in the program in time, you have to cancel your LLP withdrawals. For more information, see How to cancel your LLP withdrawal.

How much you can withdraw

Under the LLP, you can withdraw up to $10,000 from your RRSPs in a calendar year. This is your annual LLP limit. The amount you withdraw is not limited to the amount of tuition or other education expenses. Your spouse or common-law partner can also withdraw up to $10,000 from their RRSPs under the LLP in the same year you do. For more information, see Can my spouse or common-law partner and I participate in the LLP at the same time?.

You cannot withdraw more than $20,000 each time you participate in the LLP. This is your total LLP limit. You can participate in the LLP again, starting the year after you bring your LLP balance to zero.

If you withdraw more than the annual LLP limit of $10,000, the excess will be included in your income for the year of the withdrawal. The excess does not reduce your total LLP limit of $20,000.

If you withdraw more than the total LLP limit of $20,000, the excess will be included in your income for the year you exceed the total LLP limit.

When can you make LLP withdrawals?

As long as the LLP student continues to meet the LLP conditions (see What conditions does the LLP student have to meet?) you can keep withdrawing amounts from your RRSPs until the earliest of the following:

  • the commencement of your repayment period, or
  • January of the fourth calendar year after the year you made your first LLP withdrawal.

You may not make additional LLP withdrawals until the year after the LLP balance is zero.

Example 1

Carlos made LLP withdrawals of $10,000 in 2009 and $5,000 in 2010 as his spouse was attending university. His spouse files income tax and benefit returns every year indicating she is enrolled in a full-time program. Carlos would like to withdraw another $5,000 in 2014. However, even though his spouse is still in school, he will have to start repaying his previous $15,000 withdrawals in 2014 and any 2014 withdrawal would be considered as ineligible and taxable.

Example 2

Nadia made her first LLP withdrawal in 2012 for herself as the LLP student and completed the program the same year. She was not a student in 2013 or in 2014. However, in 2014 she enrolled full-time in a program beginning in January 2015 and would like to make another LLP withdrawal. Since Nadia will have to start repaying her 2012 withdrawal in 2014 (see chart When to start repaying your LLP withdrawals) she cannot make another LLP withdrawal in 2014 nor in subsequent years until the year after her first withdrawal has been fully repaid.

Example 3

Angela had made an LLP withdrawal of $5000 in 2004 as her spouse was enrolled full-time in a program that year. Her repayment period started in 2006 and she has been making a $500 repayment each year. In 2015, she decided to return to school and would like to make a withdrawal of $10,000.Such a withdrawal would not be eligible unless she chooses to use her RRSP contributions on her 2014 income tax and benefit return to fully repay the remaining $1000 by making the designation in Part B on her Schedule 7 of her 2014 income tax and benefit return. If she does so, she could then start a new participation period beginning in 2015 and designate herself as the student.

How to make an LLP withdrawal

To make an LLP withdrawal, use Form RC96, Lifelong Learning Plan (LLP) Request to Withdraw Funds from an RRSP. You have to complete Form RC96 for each withdrawal that you make. To get this form, go to Forms and publications.

Complete Part 1 of Form RC96. You can name yourself or your spouse or common-law partner as the LLP student in Part 1. After you fill out this part, give the form to your RRSP issuer, who will fill out Part 2. Your RRSP issuer will not withhold tax from the funds you withdraw if you meet the LLP conditions. Your RRSP issuer will send you a T4RSP slip, Statement of RRSP Income showing the amount you withdrew under the LLP in box 25. Attach this slip to your income tax and benefit return.

Filing an income tax and benefit return

Starting in the year you make your first LLP withdrawal, you have to file an income tax and benefit return every year until you have repaid all your LLP withdrawals or included them in your income. You have to send us an income tax and benefit return even if you do not owe any tax or you did not make a repayment to your RRSP.

Complete Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities (included in your general income tax and benefit package), and attach it to your income tax and benefit return to show the LLP withdrawals or the repayments made in the tax year. This will help both you and us to keep track of them.

When you report a withdrawal on the Schedule 7, tick Box 264 if your spouse or common-law partner is the student. If you do not make this indication we will assume that you are the designated student. If withdrawals are made in different years, the student indicated must remain the same or your withdrawal may be considered ineligible.

How the withdrawal affects your RRSP deduction

You can continue to contribute to RRSPs/PRPPs and deduct them from your income on your income tax and benefit return after you have made an LLP withdrawal. However, you may not be able to deduct contributions you made before the withdrawal. The following explains the restrictions that apply.

If you do not have an RRSP/PRPPs, you cannot set one up and then make an LLP withdrawal immediately. The contribution has to be in the RRSP for 90 days before you can deduct it from your income on your income tax and benefit return.

If you already have an RRSP and you contribute to it in the 89-day period before you make an LLP withdrawal, you may not be able to deduct the contribution from your income on your income tax and benefit return at any time even if you repay this amount to your RRSP under the LLP. If the value of the RRSP right after the LLP withdrawal is more than or the same as the amount of the RRSP contribution, you can deduct the entire contribution. If the value of the RRSP right after the LLP withdrawal is less than the amount of the RRSP contribution, you cannot deduct any or all of the contribution.

To find out how much you cannot deduct, use the following formula for each RRSP from which you make an LLP withdrawal:

Total contributions you made to the RRSP in the 89-day period before the LLP withdrawal

Minus:
Value of the RRSP immediately after you made the LLP withdrawal

Equals:
The part of the contributions you cannot deduct at any time

Example 4

Stephen has an RRSP with a value of $6,500. He contributes $8,000 to the RRSP on February 10, 2014. He then makes an LLP withdrawal of $10,000 on March 1, 2014. The value of the RRSP after the withdrawal is $4,500.

Step 1: Calculate value of RRSP after contribution on February 10, 2014
Value of RRSP before contribution ($6,500) + February 10, 2014 contribution ($8,000) = Value of RRSP after contribution ($14,500)

Step 2: Calculate value of RRSP after withdrawal on March 1, 2014
Value of RRSP after the contribution ($14,500) − LLP withdrawal ($10,000) = Value of RRSP after withdrawal ($4,500)

Step 3: Calculate amount of RRSP contribution that cannot be deducted
Contribution in the 89 days before the LLP withdrawal ($8,000) − Value of RRSP after the withdrawal ($4,500) = Amount of RRSP contribution that cannot be deducted ($3,500)

Stephen cannot deduct $3,500 of the contribution he made on February 10, 2014, for any year.

Use the Appendix to determine the part of the RRSP contributions you or your spouse or common-law partner made that is not deductible for any year.

What happens if the LLP student leaves the educational program?

For you to be able to repay the LLP withdrawals over a 10-year period, the LLP student usually has to either:

  • complete the program; or
  • continue to be enrolled in the educational program at the end of March of the year after the LLP withdrawal.

If the LLP student leaves the program before April of the year after the withdrawal, you can still make your repayments over a 10-year period if less than 75% of the student's tuition is refundable by the educational institution.

If the LLP student leaves the program before April of the year after the withdrawal, and 75% or more of the LLP student's tuition is refundable, you have to cancel the LLP withdrawal. For more information, see How to cancel your LLP withdrawal. If you do not cancel it, the amount you withdrew will be included in your income for the year you withdrew it.

We check the LLP student's education amount on line 322 of Schedule 11 of their income tax and benefit return for the year you make the withdrawal and for the following year. If we cannot determine from the education amount that the LLP student has continued in the program, we will contact you to find out if you still meet the conditions to make the repayments over a 10-year period.

Example 5

In September 2014, George withdraws $1,000 from his RRSPs under the LLP. Earlier in the same month, he enrolled in a four-month college program and paid $750 in tuition fees. George completes the program in January 2015. Therefore, he can repay his LLP amounts over a 10-year period.

Note

Special rules apply if the LLP student dies. For more information, see If the person who made the LLP withdrawal dies.

Can an LLP withdrawal be cancelled

You can cancel your LLP withdrawal by paying the amount withdrawn back to your RRSPs (a cancellation payment) only if one or more of the following situations apply:

  • The LLP student was not enrolled in the qualifying educational program when you made the withdrawal but had received written  notification that he or she was entitled to enrol before March of the following year and did not enrol in time.
  • The LLP student left the program before April of the year after the withdrawal, and 75% or more of the student’s tuition was refundable.
  • You became a non-resident of Canada before the end of the year in which you made an LLP withdrawal.

A cancellation payment is not considered an RRSP contribution and therefore, must not be entered as a contribution
in “Part A – Contributions” of Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities, as you cannot claim a deduction for this amount on your income tax and benefit return.

How to cancel your LLP withdrawal

Step 1 – Repay the amount you withdrew from your RRSP. You can make your cancellation payment to your PRPP or any of your RRSPs, or open a new RRSP. You cannot make a cancellation payment to your spouse’s or common-law partner’s RRSPs. Your RRSP issuer will give you a RRSP contribution (cancelation payment) receipt.

Note

If you do not repay all the funds you withdrew, you have to include the unpaid amounts in your income for the year they were withdrawn. If we have already assessed your income tax and benefit return for that year, we will reassess it to include the unpaid amount. We may also charge you interest and penalties.

Step 2 – Send us a letter and include the following:

  • the information about the RRSP owner (this is the individual who made the RRSP withdrawal);
    • first name and initials;
    • last name;
    • social insurance number;
    • mailing address; and
    • telephone number.
  •  the year you made the withdrawal;
  • the amount withdrawn;
  • the reason for the cancellation:
    • The LLP student was not enrolled in the qualifying educational program when you made the withdrawal but had received written notification that he or she was entitled to enrol before March of the following year and did not enrol in time.
    • The LLP student left the program before April of the year after the withdrawal, and 75% or more of the student’s tuition was refundable.
    • You became a non-resident of Canada before the end of the year in which you made an LLP withdrawal.
  • the amount and date of the cancellation payment; and
  • the signature of the RRSP owner.

Step 3 – Send this letter along with your RRSP contribution (cancelation payment) receipt to:

Pension Workflow Section
Ottawa Technology Centre
875 Heron Road
Ottawa ON K1A 1A2

You cannot make your cancellation payment if the withdrawal did not meet the LLP conditions when you made the withdrawal. One or more of the situations listed above must apply for you to cancel your withdrawal.

Due date for cancellation payment

If you are a resident of Canada when you file your income tax and benefit return for the year in which you made the LLP withdrawal, the due date for the cancellation payment is December 31 of the year after the year you made the withdrawal.

If you are a non-resident of Canada when you file your income tax and benefit return for the year in which you made the LLP withdrawal, the due date for the cancellation payment is whichever is earlier:

  • the date you file your income tax and benefit return for the year you made the withdrawal; or
  • December 31 of the year after the year of the withdrawal.
Example 6

On May 3, 2014, Patrick applies to three Canadian universities as a full-time student.

On July 12, 2014, Patrick receives a written offer to enrol in a program at one of the universities. On July 13, 2014, he makes an LLP withdrawal of $10,000 from his RRSP. Since Patrick withdrew the funds in 2014, he has to enrol in the program before March 1, 2015. If he does not, Patrick will have to cancel the LLP withdrawal by paying back the $10,000 to his RRSP (or PRPP) by December 31, 2015. Any amount he does not repay will be included in his income for 2014.

Questions you may have

How often can I participate in the LLP?

There is no limit to the number of times you can participate in the LLP over your lifetime. Starting in the year after you bring your LLP balance to zero, you can participate in the LLP again and withdraw up to $20,000 over a new participation period.

Can my spouse or common-law partner and I participate in the LLP at the same time?

Yes. You can do any of the following:

  • you can participate in the LLP for yourself while your spouse or common-law partner participates in the LLP for him or herself;
  • you can both participate in the LLP for either of you; or
  • you can participate in the LLP for each other.

Each of you can withdraw up to the annual LLP limit of $10,000 in a year and up to the total LLP limit of $20,000 over the period you are participating in the LLP.

Can I make LLP withdrawals from more than one RRSP?

You can make LLP withdrawals for you or your spouse or common-law partner from more than one RRSP as long as you are the annuitant (plan owner) of each RRSP. Your RRSP issuer will not withhold tax on these amounts. Although the maximum amount that you can withdraw each time you participate is $20,000, there is an annual withdrawal limit of $10,000.

Note

Similar to locked-in RRSPs, pooled registered pension plans (PRPPs) do not allow for LLP withdrawals. However, you can designate your PRPP contributions as an LLP repayment.

Can I make LLP withdrawals for other purposes?

As long as you meet all of the LLP conditions when you make the withdrawal, you can use the funds you withdrew for any purpose.

Can I participate in the LLP and in the Home Buyers' Plan at the same time?

You can participate in the LLP even if you have not yet fully repaid the withdrawn amounts from your RRSPs under the Home Buyers’ Plan (HBP). For more information about the HBP, see Guide RC4135, Home Buyers' Plan (HBP).

What if the LLP student does not qualify for the education amount?

It is possible to participate in the LLP if the LLP student is a full time student but does not qualify for the education amount on line 322 of Schedule 11 of his or her income tax and benefit return because he or she is receiving a reimbursement, benefit, grant, or allowance for the educational program. In such a case, we may ask you for documents to show that you qualify to participate in the LLP.


Chapter 2 – Repaying your withdrawals

Over a period of 10 years, you have to repay to your RRSPs/PRPPs the amounts you withdrew under the LLP. Generally, for each year of your repayment period, you have to repay 1/10 of the total amount you withdrew, until the LLP balance is zero.

When and how much to repay

You will receive an LLP Statement of Account each year with your notice of assessment or notice of reassessment. This statement will show the LLP withdrawals, your LLP balance, the amounts you have repaid to date, cancellations, income inclusions, and the amount you have to repay the following year.

To view your LLP Statement of Account online, go to My account for Individuals or Represent a Client.

To determine when you have to start repaying your LLP withdrawals, use the chart. The latest year you can start repaying your LLP withdrawals is the fifth year after your first LLP withdrawal. However, in most cases, you have to start repaying your withdrawals before that year.

We determine when your repayment period starts by checking on line 322 of Schedule 11 of the LLP student's income tax and benefit return to see if the student was entitled to the education amount as a full-time student for at least three months. If the LLP student does not meet this education amount condition two years in a row, your repayment period usually starts in the second of those two years. If the LLP student continues to meet this condition every year, your repayment period starts in the fifth year after your first LLP withdrawal.

In some cases, the LLP student is not entitled to the education amount as a full time student for at least three consecutive months in any calendar year. This can happen if the program is short and the student starts it near the end of the year. In that case, your first repayment year is the second year after the year of your LLP withdrawal. If the student is not entitled to the education amount for three months in any year because the student left the program, see What happens if the LLP student leaves the educational program?.

Example 7

Sarah makes LLP withdrawals from 2011 to 2014. She continues her education from 2011 to 2016, and is entitled to claim the education amount as a full-time student for at least three months on her income tax and benefit return every year. Sarah's repayment period begins in 2016, since 2016 is the fifth year after the year of her first LLP withdrawal.

The due date for her first repayment is March 1, 2017, which is 60 days after the end of 2016 her first repayment year.

Example 8

Joseph makes an LLP withdrawal in 2013 for a qualifying educational program he is enrolled in during 2013. He is entitled to the education amount as a full-time student for five months of 2013. Joseph completes the educational program in 2014, and he is entitled to the education amount as a full-time student for five months on his income tax and benefit return for 2014. He is not entitled to the education amount for 2015 or 2016. Joseph's repayment period begins in 2016.

Note

Even if you become bankrupt, you still have to repay all your LLP withdrawals to your RRSPs. If you do not, you have to include the required amounts in your income each year as they become due.

When to start repaying your LLP withdrawals

Use the steps below to determine when you have to start repaying your LLP withdrawals. This steps do not cover cancelling your withdrawal. For that situation, see How to cancel your LLP withdrawal.

Step 1: Is this the year of your first LLP withdrawal?
If yes, you do not have to start repaying your LLP withdrawal this year.
If no, go to Step 2.

Step 2: Is this the fifth year after your first LLP withdrawal?
(If you made your first LLP withdrawal in 2010, then 2015 would be the fifth year after your first LLP withdrawal.)
If yes, you have to start repaying your LLP withdrawals this year.
If no, go to Step 3.

Step 3: Will the LLP student be entitled to the education amount as a full-time student on line 322 of Schedule 11 of his or her tax return for at least three months this year?
If yes, you do not have to start repaying your LLP withdrawals this year.
If no, go to Step 4.

Step 4: Was the LLP student entitled to the education amount as a full-time student for at least three months on his or her tax return for last year?
If yes, you do not have to start repaying your LLP withdrawals this year.
If no, you have to start repaying your LLP withdrawals this year.

How to make your repayments

To make your repayments, you have to contribute to your RRSPs or PRPP in the repayment year or in the first 60 days of the following year. You can make the repayments to any of your RRSPs with any issuer, your PRPP, or you can open a new RRSP.

You cannot designate a contribution you made to your spouse's or common-law partner's RRSPs (or a contribution your spouse or common-law partner made to your RRSPs) as a repayment under the LLP. You have to designate your repayment for the year by completing Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities (included in your income tax and benefit package), and file it with your income tax and benefit return for the repayment year.

You have to make your repayments to your RRSPs/PRPPs even if your RRSP deduction limit is zero or a negative amount. We do not consider an amount you designate as a repayment under the LLP to be an RRSP/PRPP contribution. Therefore, you cannot claim a deduction for this amount on your income tax and benefit return.

Example 9

Betty has an LLP balance of $7,500. Her repayment period is from 2014 to 2023. For her first repayment year, she needs to repay $750, which is 1/10 of the amount she withdrew. Betty contributes $6,000 to her RRSPs in 2014. To designate $750 as her 2014 repayment, she has to file Schedule 7 with her 2014 income tax and benefit return. Betty can deduct the remaining $5,250 she contributed if the RRSP deduction limit shown on her notice of assessment for 2013 is at least $5,250.

Contributions you cannot designate

Not all contributions you make to your RRSPs in the repayment year, or in the first 60 days of the following year can, be designated as a repayment under the LLP.

You cannot designate contributions that :

  • you make to your spouse's or common-law partner's RRSPs (or that he or she makes to your RRSPs);
  • are amounts you transfer directly to your RRSPs from a registered pension plan, deferred profit sharing plan, registered retirement income fund, specified pension plan, PRPP, or another RRSP;
  • are amounts you deducted as a re-contribution of an excess qualifying withdrawal that you designated to have a provisional past service pension adjustment approved;
  • are amounts that you designate as a repayment under the Home Buyers' Plan (HBP) for the year;
  • are amounts you contribute in the first 60 days of the repayment year, that you:
    • deducted on your income tax and benefit return for the previous year, or
    • designated as a repayment for the previous year under the HBP or the LLP.
  • are amounts you receive in the repayment year (such as retiring allowances) that you transfer to your RRSPs and deduct or will deduct on your income tax and benefit return for that year.

If you want to repay earlier

Any payments you make before the first repayment year reduce your first required repayment. For example, your first repayment year is 2015 and $1,000 is your required repayment. If you make an early repayment of $600 in 2014, your required repayment for 2015 is $400.

If you repay less than the amount required

If you designate an amount that is less than the amount you have to repay, you have to include the difference in your income on line 129 of your income tax and benefit return. The amount you include in your income is equal to the amount you have to repay minus the amount you designate as a repayment for the year. The amount you include in your income cannot be more than the result of this calculation.

Your LLP balance is reduced by the amount you repay plus the amount you include in income. If you want to calculate the amount you have to repay for the next year, divide your LLP balance by the number of years remaining in your repayment period.

Example 10

Josée makes a $10,000 LLP withdrawal in 2012 for a four-month qualifying educational program that finishes in the same year. For 2014, Josée's repayment is $1,000 ($10,000 ÷ 10). Josée contributes $700 to her RRSPs in 2014, and she files Schedule 7 with her income tax and benefit return to designate the $700 as a repayment under the LLP. Josée has to include $300 in her income on line 129 of her 2014 income tax and benefit return. She determined this as follows:

Amount she has to repay for 2014 ($1,000) − Amount she designates as a repayment on Schedule 7 ($700) = Amount she includes on line 129 ($300)

She cannot claim a deduction for the $700 contributed to her RRSPs because she designated those contributions as a repayment under the LLP. In 2015, she will have to repay $1,000 ($9,000 ÷ 9).

If you repay more than the amount required for a year?

If you repay and designate more than you have to repay for a year, the amount you have to repay in each of the following years will be less. The LLP Statement of Account that we send with your notice of assessment or notice of reassessment takes into account any additional payments you make and tells you how much you have to repay for the next year. If you want to calculate the amount you have to repay for the next year, divide your LLP balance by the number of years left in your repayment period.

Example 11

Alexander's repayment period began in 2010. His LLP balance was $8,500. Alexander's repayment
for 2010 was $850 ($8,500 ÷ 10). He made the repayment for 2010, 2011 and 2012. In 2013, he received an inheritance and decided to contribute $4,000 to his RRSPs and designate that amount as a repayment under the LLP for 2013. He calculates the amount he has to repay for 2014 using the following chart:

Calculating the annual amount Alexander has to repay
Year LLP balance at the beginning of the year Amount Alexander has to repay for the year Amount Alexander designates as a repayment for the year LLP balance for the following year
2010 $8,500 $850
($8,500 ÷ 10)
$850 $7,650
2011 $7,650 $850
($7,650 ÷ 9)
$850 $6,800
2012 $6,800 $850
($6,800 ÷ 8)
$850 $5,950
2013 $5,950 $850
($5,950 ÷ 7)
$4,000 $1,950
2014 $1,950 $325
($1,950 ÷ 6)
$325 $1,625

Situations when the repayments have to be made in less than 10 years

Additional repayment rules apply if you:

  • die;
  • become a non-resident of Canada; or
  • reach the age of 71.

If the person who made the LLP withdrawal dies

Usually, if the person who made the LLP withdrawal dies, the legal representative (liquidator) has to include the LLP balance in the deceased person's income for the year of death. If the deceased person contributed to an RRSP in the year of death, the representative can designate the contributions as a repayment under the LLP by completing Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities. This reduces the LLP balance that has to be included in the deceased person's income.

Note

An LLP student who dies may not have been the person who made the LLP withdrawal. If this is the case, the person who made the withdrawal makes the required LLP repayments over the usual 10-year period.

LLP election on death

If, at the time the person who made the LLP withdrawal dies, and the deceased had spouse or common-law partner who is a resident of Canada, that spouse or common-law partner can elect jointly with the deceased person's legal representative (liquidator) to make the repayments and to not include the LLP balance in the deceased person's income. If the surviving spouse or common-law partner is also the representative, he or she makes the election.

To make this election, the surviving spouse or common-law partner and the deceased person's legal representative sign a letter and attach it to the deceased person's income tax and benefit return for the year of death. The letter should state that an election is being made to have the surviving spouse or common-law partner make the repayments under the LLP, and to not have the income inclusion rule apply to the deceased person. The deceased person's LLP balance then becomes the survivor's LLP balance. The surviving spouse or common-law partner makes the repayments to his or her own RRSPs/PRPPs.

Note

If this election is made and the deceased person had not made a repayment for the year of death, no repayment will be required for that year for the deceased.

If the surviving spouse or common-law partner has no LLP balance of his or her ownat the time the person who made the LLP withdrawal dies, the survivor is deemed to be the LLP student for the LLP balance taken over from the deceased person. The surviving spouse or common-law partner will have to make repayments to his or her RRSP over the normal 10-year repayment period, determined as though the year of his or her first LLP withdrawal is the year the person died. For more information on when the repayment period will begin see When and how much to repay, and the chart When to start repaying your LLP withdrawals.

If the surviving spouse or common-law partner wants to make LLP withdrawals, the LLP balance taken over from the deceased person will limit the amount he or she can withdraw.

The survivor's total limit will be $20,000 minus the LLP balance taken over from the deceased person. The annual LLP limit for the year of death will be $10,000 minus the remaining LLP balance of the deceased person.

Example 12

Isabelle died in 2014. At the time of death, she had an LLP balance of $7,200. Her repayment period began in 2013. Her husband Bruno is her liquidator (legal representative).

Bruno decides to elect to make the repayments. When he prepares Isabelle's income tax and benefit return for 2014, he does not include her LLP balance in her income. Instead, he writes a letter explaining that he is electing to make his late wife's LLP repayments. He signs the letter and attaches it to her final income tax and benefit return. Bruno becomes an LLP participant in 2014 having an LLP balance of $7,200. If Bruno is not entitled to the education amount as a full-time student for at least three months in both 2015 and 2016, his repayment period will begin in 2016. He may choose to make repayments in 2014 or 2015, in which case they will be applied to the balance to reduce or eliminate the required repayment in 2016 and subsequent years. For more information see If you want to repay earlier.

If Bruno wants to participate in the LLP in 2014 for his own education, his total LLP limit is now $20,000 minus the remaining LLP balance from Isabelle. In addition, his annual LLP limit for 2014 is $10,000 minus the remaining LLP balance from Isabelle.

If Bruno did not make the election, he would have to include $7,200 as income on line 129 of Isabelle's final income tax and benefit return for 2014.

If the surviving spouse or common-law partner already had an LLP balance of his or her own at the time the person dies, the deceased person's LLP balance is added to the survivor's LLP balance. This may cause the survivor's LLP balance to be more than the $10,000 annual limit or the $20,000 total limit. If this occurs, we will not include the excess in the income of either the survivor or the deceased person. The surviving spouse or common-law partner has to repay the new balance over his or her own repayment period.

Example 13

Irene died on June 10, 2014. At the time of death, she had an LLP balance of $7,000 to be repaid. Irene's common-law partner Paul is the estate's liquidator (legal representative). He decides to make Irene's LLP repayments. He has his own LLP balance of $14,000, and his repayment period began in 2014. Paul will add Irene's LLP balance of $7,000 to his own LLP balance of $14,000. However, Paul is only required to make a repayment of $1,400 in 2014 based on his own LLP balance of $14,000 at the beginning of the year. If he pays only the required amount, in 2014, his minimum LLP repayment in 2015 will be $2,177 ($19,600 ÷ 9).

If you become a non-resident of Canada

If you become a non-resident of Canada after the year you made an LLP withdrawal, you have to include your LLP repayable balance in income on your income tax and benefit return for the year you become a non-resident or repay that balance to your RRSPs. The due date for this repayment is the earlier of the following dates:

  • before the time you file your income tax and benefit return for the year that you become a non-resident; or
  • 60 days after you become a non-resident.

You have to designate your repayment for the year by completing Schedule 7 and filing it with your income tax and benefit return for the year that you become a non-resident. If you do not repay your LLP balance by the due date, you have to include the unpaid amount in your income for the year that you became a non-resident. The amount is included in your income for the period you were a resident of Canada.

If you become a non-resident before the end of the year in which you make an LLP withdrawal, you have to cancel your LLP withdrawals by paying them back to your RRSPs.

For more information, see How to cancel your LLP withdrawal.

Your options in the year you turn 71

After the end of the year you reach the age of 71, you will not be able to repay any withdrawals to your RRSP. This is because you cannot contribute to an RRSP after the end of the year you turn 71 years of age.

In the year you turn 71, you can choose one of the following:

  • repay to your RRSP your remaining repayable balance.
  • make a partial repayment to your RRSP. Your remaining repayable balance at the beginning of the year you turn 72 will be divided by the number of years remaining in your repayment period, and that calculated amount will be included as income on line 129 of your income tax and benefit return for each of those years.
  • make no repayment to your RRSP. Your remaining repayable balance at the beginning of the year you turn 71 will be divided by the number of years remaining in your repayment period, and that calculated amount will be included as income on line 129 of your income tax and benefit return for each of those years.
Example 14

In 2007, at the age of 64, Henry made an LLP withdrawal of $9,000. His repayment period began in 2012. The required annual repayment is $900.

In 2014, he reaches the age of 71. Henry's LLP balance at the beginning of 2014 is $7,200 and he can choose to make an LLP repayment, or to include $900 in his income.

In 2014, Henry decides to contribute $3,000 to his RRSPs/PRPP and to designate that amount as a repayment under the LLP. This leaves him with an unpaid balance of $4,200 at the end of 2014. Henry will have to include $600 ($4,200 ÷ 7) in income for each year from 2015 to 2021.

If he did not repay any part of the $7,200, he would have to include $900 in income each year from 2014 to 2021. If he repaid the entire $7,200, he would not have to include any part of this amount in his income

Appendix - Effect of LLP on RRSP deductions

Calculating the part of RRSP contributions that is not deductible for any year.

Use a separate chart for each withdrawal made under the LLP.

Note

For the purpose of this worksheet, your contributions to your PRPP are considered to be an RRSP contribution.

Area 1 - Complete this area if you are the only one who contributed to your RRSP during the 89-day period just before you withdrew an amount from that RRSP.

Do not include:

  • any amounts for which you did not receive an RRSP receipt;
  • contributions that represent lump-sum amounts (for example, retiring allowances) that you transferred to this RRSP. However, you have to include lump-sum amounts that represent contributions you made to another RRSP during the 89-day period just before your withdrawal, and that were transferred to the RRSP indicated on line 1;
  • the excess amount that you withdrew from your RRSPs in connection with the certification of a provisional past service pension adjustment, that you re-contributed to this RRSP in the 89-day period just before your withdrawal, and for which you claim or will claim a deduction;
  • an amount you contributed to this RRSP that was refunded to you as an unused amount (if you have completed Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in___ ); or
  • amounts you contributed as a repayment or cancellation payment to your RRSP under the Home Buyers’ Plan.

Amounts you contributed to the above RRSP during the 89-day period just before you withdrew an amount from that RRSP under the LLP - Fair market value of the property held in the above RRSP just after you made your withdrawal = Amount of your contributions to the RRSP .

If amount of your contributions to the RRSP is negative, report your contributions to the RRSP as zero.

Step 1: Enter the RRSP account number.

Step 2: Enter the amounts you contributed to the above RRSP during the 89-day period just before you withdrew an amount from that RRSP under the LLP.

Step 3: Enter the fair market value of the property held in the above RRSP just after you made your withdrawal.

Step 4: Subtract the amount in step 2 from step 3 (if negative, enter "0"). This is the amount of your contributions to the RRSP indicated on line 1 that you cannot deduct for any year.

Area 2 - Complete this area if you contributed to your spouse's or common-law partner's RRSP during the 89-day period just before your spouse or common-law partner withdrew an amount from that RRSP.

Do not include:

  • any amounts for which you or your spouse or common-law partner did not receive an RRSP receipt;
  • contributions that represent lump-sum amounts (for example, retiring allowances) that your spouse or common-law partner transferred to this RRSP. However, you have to include lump-sum amounts that represent contributions that your spouse or common-law partner made to another RRSP during the 89-day period just before your spouse’s or common-law partner’s withdrawal, and that he or she transferred to the RRSP indicated on line 5;
  • the excess amount that your spouse or common-law partner withdrew from their RRSPs in connection with the certification of a provisional past service pension adjustment, that your spouse or common law partner re-contributed to this RRSP in the 89-day period just before their withdrawal, and for which your spouse or common law partner claims or will claim a deduction;
  • an amount you or your spouse or common-law partner contributed to this RRSP that was refunded to you or your spouse or common-law partner as an unused amount (if you or your spouse or common-law partner have completed Form T3012A, Tax Deduction Waiver on the Refund of Your Unused RRSP Contributions Made in___ ); or
  • amounts your spouse or common-law partner contributed as a repayment or cancellation payment to their RRSPs under the Home Buyers’ Plan.

If both you and your spouse or common-law partner made contributions to the above RRSP during the 89-day period just before your spouse or common-law partner made an LLP withdrawal, the earliest contributions made during this period are non-deductible.

Amounts you and your spouse or common-law partner contributed to the above RRSP during the 89-day period just before your spouse or common-law partner withdrew an amount from that RRSP under the LLP - Fair market value of the property held in the above RRSP just after your spouse or common-law partner made their withdrawal = Amount of the contributions to the RRSP that is not deductible for any year.

If amount of the contributions to the RRSP is negetive, report amount of the contributions that is not deductible for any year as zero.

Step 5: Enter the RRSP account number.

Step 6: Enter the amounts you and your spouse or common-law partner contributed to the above RRSP during the 89-day period just before your spouse or common-law partner withdrew an amount from that RRSP under the LLP.

Step 7: Enter the fair market value of the property held in the above RRSP just after your spouse or common-law partner made their withdrawal.

Step 8: Subtract the amount in Step 6 from Step 7 (if negative, enter "0"). This is the amount of the contributions to the RRSP indicated on line 5 that is not deductible for any year.

If both you and your spouse or common-law partner made contributions to the above RRSP during the 89-day period just before your spouse or common-law partner made an LLP withdrawal, the earliest contributions made during this period are non-deductible.

RC96 Lifelong Learning Plan (LLP) Request to withdraw funds from an RRSP

RC96 Lifelong Learning Plan (LLP) Request to withdraw funds from an RRSP

For more information

What if you need help?

If you need more information after reading this guide, visit Canada Revenue Agency or call 1-800-959-8281.

Forms and publications

To get our forms or publications, go to Forms and publications or call 1-800-959-8281.

Guide

RC4135 - Home Buyers' Plan (HBP)

Pamphlets

P105 - Student and Income Tax

RC4059 - My Account for individuals

Forms

Schedule 7 - RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities

RC96 - Lifelong Learning Plan (LLP) Request to Withdraw Funds from an RRSP

T2202 - Education and Textbook Amounts Certificate

My Account

Using the CRA's My Account service is a fast, easy, and secure way to access and manage your tax and benefit information online, seven days a week! If you are not registered with My Account but need information right away, use Quick Access to get fast, easy and secure access to some of your information.

You can use either your CRA user ID and password, or the same sign-in information you use for other online services (for example, online banking) to log in to My Account.

For more information, go to My Account.

Representatives

You can authorize a representative (such as your spouse or common-law partner, tax preparer, or accountant) to get information bout your tax matters and give us information on your behalf. We will accept information from and/or provide information to your representative only after we have received your authorization through My Account, in writing, or by sending a completed Form T1013, Authorizing or Cancelling a Representative. Your authorization will stay in effect until you or your representative cancels it, it reaches the expiry date you choose, or we receive notification of your death. You or your representative can cancel the authorization by telephone, in person, or in writing. You can also cancel an authorization using My Account.

For more information, go to My Account, or see Form T1013, Authorizing or Cancelling a Representative.

Tax Information Phone Service (TIPS)

For personal and general tax information by telephone, use our automated service, TIPS, by calling 1-800-267-6999.

Teletypewriter (TTY) users

TTY users can call 1-800-665-0354 for bilingual assistance during regular business hours.

Our service complaint process

If you are not satisfied with the service that you have received, contact the CRA employee you have been dealing with or call the telephone number that you have been given. If you are not pleased with the way your concerns are addressed, you can ask to discuss the matter with the employee's supervisor.

If the matter is not settled, you can then file a service complaint by completing Form RC193, Service-Related Complaint. If you are still not satisfied, you can file a complaint with the Office of the Taxpayers' Ombudsman.

For more information, go to Service complaints or see Booklet RC4420, Information on CRA – Service Complaints.

Reprisal complaint

If you believe that you have been subject to reprisal, complete Form RC459, Reprisal Complaint. For more information about reprisal complaints, go to Reprisal Complaints.

Tax information videos

We have a number of tax information videos for individuals on topics such as the income tax and benefit return, students, and tax measures for persons with disabilities. To watch our videos, go to Video gallery.

Your opinion counts

If you have comments or suggestions that could help us  improve our publications, send them to :

Taxpayer Services Directorate
Canada Revenue Agency
395 Terminal Avenue
Ottawa ON   K1A 0L5

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