How to withdraw RESP funds

As the RESP’s subscriber (the person who opened and contributed to the account), you may have questions about how to withdraw RESP funds and what the beneficiary (the student) can use them for. Most of the RESP commentary talks only notionally about the withdrawal process. Here are the specifics.

What to know about RESP proof of enrollment

When you’re ready to make a withdrawal, one of the first things the RESP promoter (the financial organization that offers the RESP) will ask for is proof of enrollment in eligible post-secondary studies. The processing time for this proof could vary, and the withdrawal may not be available immediately, so plan accordingly. 

What post-secondary education is considered eligible?

• Part-time studies in Canada must be at least three consecutive weeks and at least 12 hours per month.
• Canadian full-time studies require at least three consecutive weeks with at least 10 hours of instruction or work each week. 
• Full-time studies outside Canada must last at least three weeks for university programs, or 13 weeks otherwise. Part-time studies outside Canada do not qualify.
• University, college, and trade school programs, amongst other post-secondary paths, can qualify.

To check if your child’s school is eligible, see the list of designated educational institutions on the Government of Canada’s website.

Proof of enrollment commonly accepted by RESP promoters includes:

• Invoice for tuition or on-campus residence boarding
• Official timetable from the school
• Proof of Enrolment (POE) letter from the registrar’s office at the school
• Official transcript from the school
• Verification of Enrolment (VOE) form from the plan sponsor, completed by the registrar’s office at the school

Where does RESP money go?

The RESP promoter will ask if you want the funds to be sent by cheque or electronically to you, to the beneficiary child, or directly to a post-secondary institution. Most RESP subscribers choose to have the funds paid to them directly.

There are two types of RESP withdrawals: 

• Post-secondary education (PSE) withdrawals, which represent the principal contributions made to the account. These withdrawals are tax-free.
• Educational Assistance Payments (EAPs), which represent both investment income and government grants. These EAP withdrawals are taxable to the beneficiary child.

The tax treatment of the RESP withdrawal does not change regardless of the payee for the withdrawal, so the taxable income is always the beneficiary’s no matter who receives the payment. 

When you take a withdrawal, you must decide on the allocation between these tax-free and taxable amounts.

Using RESP withdrawals

You generally do not need to provide proof of the cost of post-secondary education in order to take RESP withdrawals. The proof of enrollment is sufficient to permit a withdrawal, withone exception: If the withdrawal of taxable EAP amounts exceeds an annual limit, the RESP promoter will ask for proof that the costs exceed this threshold. In 2025, this limit is $28,881.

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In the first 13 weeks of studies, there is an EAP limit of $4,000 for part-time studies and $8,000 for full-time studies. After that time, only the annual limit applies.

Do you have to keep receipts when using RESP funds?

No, you do not need to keep receipts related to education costs for withdrawal purposes or for tax purposes. There used to be a federal textbook tax credit that required receipts, but that was eliminated in 2017.

The only documentation required for RESP withdrawal purposes is the above-mentioned proof of enrollment when requesting an RESP withdrawal or documentation for costs in excess of the annual EAP threshold if applicable.

Use it or lose it

If you wait too long to take RESP withdrawals, you may be hit with a penalty tax for unused EAP amounts remaining in the account. PSE withdrawals, representing past contributions, can come out tax-free. But any government grant portion of the RESP will be repaid if a child is no longer eligible—for example, if they decide not to continue with post-secondary education—or if you withdraw too little in the early years of their studies and they graduate or leave school before you use up the grants. 

The income and growth portion of the RESP will be taxable upon withdrawal along with a 20% penalty tax. The taxable withdrawal and penalty tax are for the subscriber, not the beneficiary, which is particularly punitive for a high-income parent or grandparent.

Subscribers can transfer up to $50,000 to their registered retirement savings plan (RRSP), subject to their eligible RRSP room, to avoid the taxable income inclusion.

Planning the timing of RESP withdrawals

It is important to plan early for the timing of RESP withdrawals, ideally starting as early as five years before your child is due to graduate from high school. 

If the RESP investments are too risky as the beneficiary approaches post-secondary education, there is a chance that stock markets could be down when the withdrawals are needed. RESP subscribers should consider reducing investment risk like stock market exposure as the time horizon lessens, because RESPs are generally fully withdrawn within four years or less. This creates a unique asset allocation strategy consideration that does not typically apply to retirement accounts withdrawn over a longer time horizon.

Since a portion of an RESP withdrawal is taxable to the beneficiary, their income in the year of withdrawal should be considered, too. Taxpayers have a federal basic personal amount that is a non-refundable tax credit wiping out tax payable on the first $16,129 of income for 2025. Provincial basic personal amounts range from $8,744 to $22,323. If an RESP has a lot of government grants and growth, the subscriber should try to strategically use up these tax-free thresholds annually at the very least. Tuition tax credits can be used to offset income in excess of these thresholds.

So much of the RESP information out there is about the importance of contributions to RESPs and how the accounts work during the accumulation period. RESP withdrawals are the end game for savers, and understanding how they work is key to using them effectively.

Read more about RESPs:

• RESPs 101: The RESP withdrawal rules
• My three kids chose different educational paths. How do I withdraw RESP funds in a way that’s fair to them and avoids unnecessary taxes?
• The top 5 questions about RESPs
• How much money does the government contribute to an RESP?

About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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