RESP Guide
RESP withdrawal rules, in the order that actually saves you tax
The account was the easy part. Getting the money out — in the right sequence, with the right paperwork — is where families quietly lose grant money.
Short answer
How do RESP withdrawals work?
Once the student is enrolled in a qualifying post-secondary program, an RESP pays out in two streams. Educational Assistance Payments (EAPs) — grant plus investment growth — are taxable to the student and capped at $8,000 in the first 13 consecutive weeks of full-time study. Post-Secondary Education (PSE) withdrawals — your original contributions — are tax-free and uncapped. Withdraw EAPs first while the student's income is low, and keep contributions as the flexible reserve.
Reviewed by Johnathan Pollock · Updated 2026-01-15
The two buckets, and why the label on the form matters
Every RESP withdrawal form asks you to designate how much comes from contributions and how much from grant and growth. Most parents tick the wrong box because the tax-free option sounds safer. It is not.
Contributions are your money and always come back tax-free, whenever you ask, once enrolment is confirmed. Grant is not your money — if the plan winds down with grant still inside, that grant is repaid to the government. Leaving the taxable bucket for last is how families end up handing money back.
The first 13 weeks: the $8,000 ceiling
During the first 13 consecutive weeks of a full-time program, EAPs are limited to $8,000. After the student has been enrolled for 13 weeks, the cap disappears and larger EAPs are permitted — subject to the provider being satisfied the amounts are reasonable for the student's costs.
For part-time enrolment the limit is $4,000 per 13-week period, and it does not lift. Plan the first-year cash flow around this: if first-year costs are $22,000 and the EAP cap holds you to $8,000, the balance comes from contributions or outside savings.
A withdrawal sequence that works
Here is the pattern we use with client families. It clears the taxable bucket while the student's income is minimal and preserves flexibility for years three and four.
- Term 1: take the full $8,000 EAP, top up with contributions if needed.
- Years 1–3: keep drawing EAPs up to roughly the student's basic personal amount plus tuition credits — usually $18,000–$25,000 of income before real tax appears.
- Final year: the EAP bucket should already be near zero. Finish on contributions.
- Every year: confirm the remaining grant balance with the provider so nothing is stranded at graduation.
Paperwork that stalls withdrawals
Providers need a proof-of-enrolment letter naming the student, the institution, the program and the term — a class schedule or tuition receipt is often rejected. Request the letter from the registrar as soon as registration closes, because the first payment routinely takes 5–10 business days.
If the student is studying outside Canada, the program must generally be at least 13 consecutive weeks (three consecutive weeks for a university degree program) at a designated institution. Verify before the deposit is paid, not after.
What if there is money left after graduation
Unused grant goes back. Unused growth becomes an Accumulated Income Payment, taxed at your marginal rate plus a 20% penalty tax unless you roll up to $50,000 into your RRSP or a spousal RRSP with available room. Contributions always come back to you tax-free.
The plan must generally have existed for 10 years and the beneficiary must be 21 or older before an AIP is allowed. If a sibling has unused RESP room, transferring the balance is almost always better than an AIP — see what to do if your child does not go to school.
Plan the four-year drawdown before term one
Use the calculator to see the projected EAP balance at 18, then map it against expected tuition and living costs so the taxable bucket empties on schedule.
Model the drawdownFrequently asked questions
- How much can you withdraw from an RESP in the first semester?
- Educational Assistance Payments are capped at $8,000 during the first 13 consecutive weeks of full-time enrolment ($4,000 for part-time studies over a 13-week period). Your own contributions can be withdrawn without that limit once the student is enrolled.
- Is an RESP withdrawal taxable?
- Only partly. Your contributions come back tax-free. The grant and growth portion is an Educational Assistance Payment, reported on a T4A in the student's name and taxed at the student's rate — usually zero once the basic personal amount and tuition credits are applied.
- What proof does the RESP provider need?
- A current enrolment confirmation from the institution showing the student's name, the program, and the term dates. Most providers want it dated within the last six months and will not release an EAP without it.
- Should I withdraw grant money or contributions first?
- Grant and growth first, in almost every case. Students typically pay little or no tax on EAPs, while leftover grant at the end of the program is returned to the government. Contributions are always available tax-free, so they are the safer balance to leave until last.
- Can RESP money be used for rent, laptops and food?
- Yes. EAPs are not restricted to tuition. Once enrolment is confirmed, the money may be used for any reasonable expense related to attending — housing, transportation, computers, books and living costs.
Sources
Written and reviewed by Johnathan Pollock
Managing Partner, Thompson & Pollock Wealth Inc. — Amazon best-selling author of The Entrepreneur's Toolkit.
Last reviewed 2026-01-15
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