Help lifelong learners save tax

By Jessica Bruno | December 11, 2015 | Last updated on September 15, 2023
3 min read

Why read this?

Your clients are:

  • › getting a post-graduate degree;
  • › going back to school as an adult; or
  • › learning a trade.

What to do

Report Lifelong Learning Plan (LLP) use

If your client returns to school, she can withdraw up to $10,000 a year, to a maximum $20,000 over four years, from her RRSP to pay her tuition. To be eligible, your client must be enrolled full-time at a qualified educational institution.

When enrolling or attending school

To withdraw funds, use form RC96: Lifelong Learning Plan Request to Withdraw Funds from an RRSP.

Have the RRSP issuer complete Part 2 of the form, and keep it for your client’s records.

At tax time


Your client’s minimum repayment is listed on her Notice of Assessment or Reassessment, on Form T1028: Your RRSP Information, or in My Account.

  • Report LLP withdrawals by listing the total from Box 25 of your client’s T4RSP: Statement of RRSP Income on Line 20 of Schedule 7: RRSP and PRPP Unused Contributions, Transfers and HBP or LLP Activities.
    • Check the box on Line 21 if your client withdrew the funds for her spouse or common-law partner.
  • Designate RRSP contributions as LLP repayments on Line 7 of Schedule 7. If your client repays less than the minimum, report the difference on Line 129 of the return.

Don’t include RRSP repayments in your total RRSP contributions.

Report RESP withdrawals

Since RESPs can stay open for 35 years, your client could use RESP money to fund her education, even if she’s an older student, says Adam Morke, tax specialist at Stern Cohen Accountants in Toronto.

  • Report withdrawals, listed in Box 42 of your client’s T4A: Statement of Pension, Retirement, Annuity and Other Income, on Line 130 of the return.

Report apprenticeship incentive or completion grants

Your client may be eligible for up to $4,000 in grants to cover tuition and other expenses for her education in a Red Seal trade, such as baking or bricklaying, which is regulated by the provinces.

  • Report grant amounts from Box 130 of your client’s T4A on Line 130 of the return.


The federal government plans to change Canada’s student loan, grant and tax credit programs. Watch for developments.

Claim interest paid on student loans

If your client has a loan under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a similar provincial program, she can claim the interest paid on her loan in the last five years.

  • Enter interest paid on Line 319 of Schedule 1: Federal Tax.

Lifelong Learning Plan or direct withdrawal?

If your client is going back to school, she may be better off withdrawing money directly from her RRSP instead of using the Lifelong Learning Plan, says Adam Morke, tax specialist at Stern Cohen Accountants.

The LLP lets people make tax-free RRSP withdrawals to pay for school. After they graduate, students have an average of 10 years to repay their withdrawals, depending on when they’re no longer full-time students. These repayments can’t be deducted from a client’s income, but any amounts she doesn’t repay are included in her income.

Withdrawing funds from an RRSP outside the LLP may be just as tax efficient, depending on your client’s anticipated in-school income, notes Morke. “Typically when people are going back to school, they have little or no income,” he notes.

“If you have zero income and you withdraw $10,000, you’re probably going to pay next to zero tax on it anyways.”

Further, withdrawing the money directly means that if a client contributes to her RRSP once she starts working again, she can deduct those contributions from her income, saving her tax. It’s still subject to the normal RRSP contribution limits.

Sources: Adam Morke, CPA, CA, manager and tax specialist, Stern Cohen Accountants, Toronto, Ont.; CRA; KPMG’s Tax Planning for You and Your Family 2015.

Jessica Bruno