What do I need to know about withdrawing from an RESP?

Ideally, you’ll want to take an Education Assistance Payment (EAP) in a way where your beneficiary won’t have to pay tax on it.

Once your beneficiary is enrolled in a post-secondary program—say, a carpentry apprenticeship or an engineering degree—the EAP money becomes available. In the first 13 weeks of full-time studies, your beneficiary can withdraw up to $5,000 in EAPs. After that, your budding engineer or carpenter can receive as much EAP money as they need for education-related expenses.

EAP money is taxable, in the hands of the beneficiary, but chances are, the child who’s using that money for school won’t be making enough money to have to pay tax on it.

Once the EAPs are used up, your original contributions remain. You can take that money back, or you can pass that money on to the child. Either way, that original contribution money won’t be taxed. Not bad, right?