Withdrawals from the plan are referred to as EAPs and are only intended for post-secondary and related expenses. EAPs are taxed in the hands of the beneficiary, and since students typically have little income, they pay little or no tax. A T4A tax slip is issued in the beneficiary's name and must be included as income for the year they receive it.
Under an EAP, the beneficiary must:
CanLearn Website (i.e. "For questions regarding designated institutions and qualifying programs, visit the CanLearn Website or call 1-866-517-5650).
A Post-secondary Capital Withdrawal is a withdrawal of contributions made by the subscriber while a beneficiary is eligible to receive EAPs. Since the beneficiary is pursuing a post-secondary education, the subscriber may withdraw their contributions without repaying any grant amounts. Current proof of enrolment is required before a payment can be processed.
There are no rules stipulating which type of payment must be made first. For withdrawal limits and more information, contact Canada Revenue Agency .
An RESP can exist for a maximum of 35 years before it must be closed should the beneficiary decide not to immediately pursue a post-secondary education. During this time, the money invested in the RESP will continue to earn tax-sheltered income.
If the beneficiary decides not to pursue a post secondary education, the subscriber may:
6Certain conditions must be met.