Two Types of RESP Withdrawals
| Type | What It Is | Taxed? | Who Pays Tax |
|---|
| PSE (Post-Secondary Education) | Your original contributions | No | Nobody |
| EAP (Educational Assistance Payment) | Grants + investment growth | Yes | Student (beneficiary) |
Strategy: EAPs are taxed in the student's name, who typically has low or no other income. Use EAPs first in early years of school when the student's income is lowest, then draw PSE withdrawals as needed.
EAP — Educational Assistance Payments
EAPs consist of the investment growth and all government grants (CESG, CLB, provincial grants). When the student withdraws this money, it's reported as income on their tax return — not yours.
EAP Limits (2025)
- First 13 weeks of full-time enrollment: Maximum $8,000 EAP
- After 13 consecutive weeks: No annual limit
- Part-time students: Maximum $4,000 per 13-week period
The 13-week limit exists to prevent large lump-sum EAPs being taken before the student truly begins studies. After that initial period, there is no cap on annual EAP withdrawals.
Tax Impact
A student with no other income can receive approximately $15,705 (2025 basic personal amount) in EAPs tax-free. Tuition credits further reduce any tax owing. Most students pay little to no tax on RESP EAPs.
PSE — Post-Secondary Education Withdrawals
PSE withdrawals are simply your original contributions coming back to you. They are completely tax-free — you already paid tax on this money when you earned it. There are no limits on PSE withdrawals once the student is enrolled.
PSE withdrawals go to the subscriber (the account opener — typically a parent), not the student. You can give the money to your child, but it flows through you. This means you're not required to give the PSE money to the child — it's the subscriber's money to use.
Qualifying Post-Secondary Programs
To make EAP withdrawals, the beneficiary must be enrolled in a qualifying educational program:
- Canadian university, college, or CÉGEP (full-time or part-time)
- Trade school, vocational programs, or apprenticeships
- Qualifying programs at foreign universities (major universities in US, UK, Australia, etc.)
- Courses at least 3 consecutive weeks long with 10+ hours/week of instruction
You'll need to provide proof of enrollment (enrollment confirmation letter) to your RESP provider to trigger EAP withdrawals.
Step-by-Step: Making RESP Withdrawals
1
Get proof of enrollment — Obtain an enrollment confirmation letter from the educational institution showing program name, start date, and full/part-time status.
2
Contact your RESP provider — Submit the enrollment letter. Online providers (Wealthsimple, Questrade) have digital upload options; banks may require in-person.
3
Choose EAP first — Request EAP withdrawals first (taxed at student's rate, which is lowest at start of school). Stay within $8,000 in first 13 weeks if in first year.
4
Draw PSE as needed — Once EAP room is used or for larger expenses, withdraw from PSE (your contributions) tax-free.
5
Track T4A — The RESP provider issues a T4A for EAP withdrawals. The student includes this on their tax return. PSE withdrawals require no tax reporting.
What If the Child Doesn't Attend School?
| Option | Details |
|---|
| Transfer to sibling | No penalty if another beneficiary is added (family plan). All grants transfer. |
| Keep the plan open | Plan can stay open 35 years from opening. Child may enroll later. |
| RRSP transfer (AIP) | Transfer up to $50,000 of growth/grants to subscriber's RRSP if subscriber has room. Tax-deferred rollover. |
| Close plan — take AIP | All grants returned to government. Growth taxed as income + 20% AIP penalty. Original contributions returned tax-free. |
Before closing: Check if you can transfer to a sibling or roll over to an RRSP first. Both options preserve more money than simply closing the plan and paying the AIP penalty.
Maximizing Tax Efficiency
Spread Withdrawals Over 4 Years
A student in a 4-year degree should draw EAPs gradually each year rather than taking everything in year 1. This keeps the student's annual income low, preserving the basic personal amount and tuition credits each year.
Coordinate with Tuition Credits
Post-secondary students get federal and provincial tuition tax credits (15% federally on tuition paid). A student paying $100/year tuition gets $1,500 in federal credits before counting the basic personal amount. Most RESP EAP withdrawals end up entirely tax-free.
Don't Delay Beyond Year 1
Don't wait until after graduation to start taking EAPs. Every year of enrollment is a year of low income where EAP can be withdrawn near-tax-free. Leaving money in until after graduation means it competes with post-graduation employment income for tax purposes.
Frequently Asked Questions
How much EAP can I take in the first year? +
In the first 13 consecutive weeks of full-time enrollment, EAP is limited to $8,000. For part-time students, the limit is $4,000. After 13 consecutive weeks, there is no annual EAP limit for full-time students.
Is an RESP EAP withdrawal taxable? +
EAP withdrawals are taxable income for the student (beneficiary), not the parent. Because students have low or no other income, and can apply tuition credits, the effective tax on EAPs is usually very low or zero. PSE withdrawals (original contributions) are never taxable.
Can I withdraw RESP for part-time school? +
Yes. EAPs are available for part-time qualifying programs. The limit in any 13-week period for part-time students is $4,000. The program must be at least 3 consecutive weeks with a minimum of 10 hours per week of instruction or training.
What happens to unused RESP money after graduation? +
Unused money stays in the RESP and can be withdrawn for up to 6 months after graduation (or the plan's 35-year limit, whichever comes first). You can take PSE withdrawals (your contributions) tax-free. EAP withdrawals after graduation are taxed at the graduate's income — which may now be higher. Plan ahead to use EAPs during enrollment.
Do I need receipts to withdraw from an RESP? +
No receipts are required. The main requirement is proof of enrollment (an enrollment letter from the school). You don't need to prove the money was spent on tuition, rent, or other expenses — you can use RESP withdrawals for any purpose once enrolled.
Can I take PSE and EAP at the same time? +
Yes. You can request both types of withdrawal simultaneously or alternate between them. Many families take maximum EAP in the early years (when student income is lowest) and supplement with PSE for larger expenses like tuition deposits and rent.