RESP Withdrawal Rules in Canada: How to Get the Money Out Without Losing the Grants

By Jordan Ellis · Published August 22, 2026 · Reviewed September 14, 2026

Quick Answer

RESP withdrawals come in two parts: Post-Secondary Education (PSE) withdrawals of your contributions — tax-free, any amount, any time the student is enrolled — and Educational Assistance Payments (EAP) of government grants and investment growth, which are taxed as the student's income and limited to $8,000 in the first 13 consecutive weeks of a full-time program ($4,000 per 13-week period for part-time studies). If the child never attends post-secondary, contributions come back tax-free, CESG grants return to the government, and the growth (AIP) is taxed at your marginal rate plus a 20% penalty unless you roll up to $50,000 into your RRSP. The plan can stay open for 35 years, so 'wait and see' is usually the right first move.

You spent 18 years feeding the RESP — the RESP guide covered that side. Getting the money out has its own rulebook, and the mistakes cost grants and penalty tax. Here’s the withdrawal playbook.

The two money streams

Every RESP dollar is one of two things, and providers track them separately:

Stream	What it is	Tax on withdrawal	Limits
PSE	Your contributions	Tax-free	None
EAP	CESG grants + all growth	Taxed to the student	$8,000 first 13 weeks (full-time); $4,000 per 13 weeks part-time

The classic first-semester squeeze: tuition + residence runs $15,000+ but EAP is capped at $8,000 for the first 13 weeks. Solution: withdraw contributions alongside — PSE has no cap. Week 14, EAP opens up fully.

The student’s tax bill (usually zero)

EAP lands on the student’s T4A. A typical student earning under ~$16,000 total owes nothing — the basic personal amount erases it, and tuition credits stack on top. Even co-op students with real income usually pay single-digit rates on EAP. Time large EAP withdrawals into years the student earns less, when you have the choice.

If they don’t go

The sequence that saves the most:

Wait. RESP plans live 35 years. Gap years, trades at 25, career changes at 30 — all still qualify. Don’t collapse a plan at 19 because of one gap year.
Transfer to a sibling — family plans do this cleanly; the grant transfers if the sibling has CESG room.
Collapse, last: contributions return tax-free; grants go back to the government; growth (AIP) takes your marginal rate plus 20%. With RRSP room, up to $50,000 of AIP rolls into your RRSP and dodges the penalty — this alone is a reason to keep some RRSP room uncommitted while kids are in their 20s.

What counts as qualifying education

Universities, colleges, CEGEPs, and trade schools and apprenticeship programs — the part everyone forgets. Full-time, part-time, and many distance programs qualify; the institution list lives on the federal government’s designated list. A welding ticket draws EAP exactly like a B.A.

The withdrawal order of operations

Proof of enrollment from the registrar → decide the PSE/EAP mix per year (EAP-heavy while enrolled, respecting the 13-week cap) → request through the provider a few weeks before tuition deadlines → student reports the T4A. And project what the plan still needs to grow: the savings goal calculator and compound interest calculator model whether contributions can stop once the balance is on track — often they can, years before withdrawal day.

Official sources

Rules and dollar limits change. Confirm current amounts with the official pages below before you act · Last reviewed September 14, 2026.

Canada Education Savings Grant (CESG) (Canada Revenue Agency)
Registered Education Savings Plans (Guide RC4092) (Canada Revenue Agency)

Frequently Asked Questions

How much can you withdraw from an RESP in the first year?

There is no limit on withdrawals of your own contributions (PSE). For the grant-and-growth portion (EAP), the limit is $8,000 during the first 13 consecutive weeks of a qualifying full-time program — after that, there is no fixed limit. Part-time students are capped at $4,000 per 13-week period throughout. Plan first-semester costs around the EAP cap by leaning on contribution withdrawals early.

Are RESP withdrawals taxable?

Contributions come out tax-free — you already paid tax on that money. EAP amounts (grants plus growth) are taxable income to the student, who typically has little or no other income and pays little or nothing thanks to the basic personal amount and tuition credits. The T4A goes to the student, not the parent.

What happens to the RESP if my child doesn't go to school?

In order: wait — plans can stay open 35 years and kids change minds. Transfer to a sibling if the plan allows (family plans keep grants if the new beneficiary has grant room). Collapse it: contributions return to you tax-free, CESG grants go back to the government, and the accumulated growth (AIP) is taxed at your marginal rate plus a 20% penalty — unless you have RRSP room, in which case up to $50,000 of AIP rolls into an RRSP penalty-free.

What proof does the student need to withdraw RESP money?

Proof of enrollment from a qualifying post-secondary institution — a confirmation letter or enrollment certificate showing program and full- or part-time status. Universities issue them from the registrar, usually as a PDF within days. The RESP provider requires it before releasing EAP money; contribution withdrawals are more flexible but providers typically ask for enrollment proof regardless.

Should I withdraw contributions or EAP money first?

Usually EAP first while the student is in school — grants and growth are only usable for education, and any EAP left when the plan closes faces grant payback plus the 20% AIP penalty. Contributions are flexible money you can always take back tax-free. The exception: if the student has significant income (co-op terms), timing EAP into low-income years saves tax.