Three Types of RESP Withdrawals
When it's time to use your RESP, there are three distinct types of withdrawals, each with different tax treatment:
| Type | What It Includes | Taxed? | Who Pays Tax |
|---|
| Education Assistance Payment (EAP) | CESG grants + investment growth | Yes | Student (beneficiary) |
| Refund of Contributions (ROC) | Your original contributions | No | Nobody |
| Accumulated Income Payment (AIP) | Investment income if no school | Yes + 20% penalty | Subscriber (you) |
Education Assistance Payments (EAPs) Explained
An EAP is a withdrawal that includes the CESG grants and the investment income earned inside the RESP. This is the "good stuff" — the government money and the compound growth. EAPs are taxable income in the hands of the student beneficiary.
Why this is so powerful: students typically have very little other income, so their marginal tax rate is near zero. The first ~$15,705 of income (the basic personal amount in 2026) is tax-free federally. A student receiving $100–$15,000 in EAPs per year may pay little to no tax on it.
Tax savings example: $100 EAP taxed in the student's hands at 0% effective rate vs $100 withdrawn by a parent in the 33% bracket = $3,300 in tax savings on a single withdrawal. Over 4 years of university, this adds up to $100+ in tax savings compared to other savings vehicles.
EAP Annual Limit — First 13 Weeks
During the first 13 weeks of enrollment in a qualifying program, EAPs are limited to $8,000. After the first 13 weeks, there is no annual EAP limit — you can withdraw as much as needed from the EAP portion.
Refund of Contributions (ROC)
Your original contributions can always be withdrawn tax-free, in any amount, at any time once the beneficiary is enrolled in qualifying education. There is no limit on ROC withdrawals and no tax consequence.
Most families choose to:
- Withdraw EAPs first (to use the tax-advantaged grants and growth)
- Withdraw contributions (ROC) as needed for additional expenses
The ROC doesn't need to be spent on education — it can go back to the subscriber for any purpose, tax-free.
Optimal RESP Withdrawal Strategy
To maximize tax efficiency:
- Year 1 of school: Withdraw up to $8,000 EAP (13-week limit applies early) + any needed ROC
- Years 2–4: Withdraw EAP each year to keep the student's income in the lowest tax bracket
- Spread withdrawals: Rather than emptying the RESP in year 1, spread EAPs over all 4 years of study so each year the student has ~$100–$15,000 EAP at low/zero tax rates
- Coordinate with tuition credits: The tuition tax credit can offset EAP tax further
| Year | EAP Withdrawal | ROC Withdrawal | Approx. Tax on EAP |
|---|
| Year 1 | $100 | $5,000 | ~$0 (below basic exemption) |
| Year 2 | $12,000 | $5,000 | ~$0–$500 |
| Year 3 | $12,000 | $5,000 | ~$0–$500 |
| Year 4 | Remaining EAP | Remaining ROC | Low rate |
What Qualifies as Post-Secondary Education?
To make EAP withdrawals, the beneficiary must be enrolled in a qualifying educational program at a designated educational institution. This includes:
- Full-time programs at Canadian universities, colleges, and technical institutes
- Part-time programs (minimum 3 weeks, 12 hours/month of courses)
- Qualifying programs at foreign universities
- Apprenticeship programs registered in Canada
- Distance/online education at qualifying institutions
The institution must be a "designated educational institution" as defined by the Income Tax Act. Most accredited post-secondary institutions in Canada qualify, plus many international universities.
Part-Time Enrollment Rules
Part-time students can also access their RESP through EAPs, but with lower annual limits:
- Part-time programs: EAP limit of $4,000 in the first 13 weeks
- After 13 weeks: No annual limit for part-time either
- Must meet minimum course hours (at least 12 hours/month on course work)
This flexibility means trade school students, part-time learners, and those taking community college courses all qualify — the RESP isn't just for full-time university students.
If the Child Doesn't Attend School — Your Options
If the beneficiary doesn't pursue qualifying education, you have several options:
- Wait: The RESP can remain open for up to 35 years — the child may enroll later
- Change the beneficiary: Switch to a sibling who will attend school (rules apply)
- Transfer to your RRSP: Transfer up to $50,000 of Accumulated Income to your RRSP if you have contribution room (grants are repaid; no penalty on this portion)
- Withdraw as AIP: Take the investment income as an Accumulated Income Payment — taxed at your marginal rate plus a 20% surtax
- Close the RESP: Contributions returned tax-free; CESG/CLB repaid; AIP taken with tax + penalty
RRSP transfer strategy: If you have available RRSP room, transferring accumulated RESP income to your RRSP avoids the 20% AIP penalty tax. The grant amounts must still be repaid to the government regardless.
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FAQs
How much EAP can I withdraw in year 1? +
During the first 13 consecutive weeks of enrollment in a full-time program, EAPs are limited to $8,000. After the first 13 weeks, there is no annual EAP limit. For part-time programs, the first 13-week limit is $4,000.
Are RESP withdrawals taxed? +
EAPs (grants + investment growth) are taxed in the student's hands — typically at a very low rate since students often have little other income. Your original contributions are always returned tax-free as a Refund of Contributions.
What documents do I need to make an EAP? +
You'll need proof of enrollment at a qualifying educational institution — typically a letter of enrollment or registration confirmation from the school. Your RESP provider will request this documentation.
Can RESP funds be used for living expenses? +
Yes. Once an EAP is withdrawn, there is no restriction on how the student spends the money. It can be used for tuition, books, housing, food, transportation, or any other expense.