But wait, there's more! Before you dive deep into the RESP adventure, you've got to know what a "qualifying program" is all about.

These qualifying programs include a diverse range of educational paths, from traditional college and university studies to trade school apprenticeships and programs recognized by the Minister of Employment and Social Development Canada.

So, there you have it. When your youngster takes that exciting leap into a qualifying program, consider your RESP funds officially up for grabs – in a good way!

In an RESP, the control lies with the subscriber, typically the person who established the plan, often a parent. Consequently, only the subscriber has the authority to request withdrawals from the account.

There are two distinct types of educational withdrawals available:

PSE withdrawals relate to the contributions made by the subscriber and offer flexibility in terms of timing.

You can tap into them without presenting any special reason – it's your RESP, and you call the shots.

You can send these funds to yourself, your child (the beneficiary), or the educational institution – whatever works best for your educational master plan.

Now, let's talk about Education Assistance Payment (EAP) withdrawals. An EAP’s primary purpose is to financially assist with covering the expenses associated with post-secondary education. This can include crucial costs like tuition fees, textbooks, and transportation to and from educational institutions.

The funds in an EAP are composed of several elements:

But here's the deal – EAPs don't include the original contributions you made as a subscriber. Nope, the focus is on using those grants, investment income, and grant income to cover educational expenses, not touching your initial investment.

When it comes to withdrawing Education Assistance Payments (EAPs) from your RESP, there's an important limit to keep in mind. The government has set a maximum lifetime cap of $7,200 per beneficiary for the Canadian Education Savings Grant (CESG). This $7,200 represents the maximum amount that can be earned in grants while saving in the RESP before the beneficiary turns 18.

It's important to note that the government won't contribute more than this $7,200 in grants, regardless of the amount you contribute to the RESP. Therefore, it's unlikely that you'll encounter a surplus amount beyond this limit in terms of government grants.

However, there's a scenario in which a surplus amount might arise. This would happen if the beneficiary doesn't use all the funds saved in the RESP for educational purposes, and the subscriber (the person who opened the RESP) decides to redeem the remaining funds for themselves. In such a case, if the total grants received, combined with investment income, exceeds $7,200, any surplus amount must be repaid directly to the government.

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The taxation of RESP withdrawals is not uniform and depends on the type of withdrawal made. It's crucial to understand the taxation rules when making RESP withdrawals.

Here's a breakdown of how taxation impacts different types of withdrawals:
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Withdrawals made when the beneficiary is pursuing post-secondary education are non-taxable. This is because these withdrawals are sourced from the contributions made by the subscriber, and taxes have already been paid on the funds contributed directly by the subscriber.

Hence, this allows for tax-free access to the money, making it an efficient way to utilize RESP funds if needed during the beneficiary's education.

Regarding Education Assistance Payment (EAP) withdrawals, it's important to understand that EAPs are usually disbursed to the student first, followed by any contributions made by the subscriber. In most cases, there isn't a choice in determining the order of withdrawal, so there's limited room for strategic planning.

It's worth noting that EAPs constitute the non-contribution portion of the RESP and are considered taxable income for the beneficiary. However, it's reassuring to know that most students typically have a low income during their studies, which means that the tax implications are generally manageable.

​Just one tip:

If the CESG sits unused during school or six months post-enrollment, it's time to repay the government.

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The amount you can withdraw from your RESP in the form of Educational Assistance Payments (EAPs) is determined by whether the student is enrolled as a full-time or part-time student.

To understand the withdrawal limits, it's essential to pay attention to the significant milestone known as "13 weeks of consecutive study." This milestone plays a crucial role in determining how much you can withdraw, and the details are outlined in the chart below:

These limits are based on 2023 data and are indexed annually.

Also, when it comes to Post-Secondary Educational Contribution Payments, there's no set limit to how much you can withdraw. However, it's always wise to consider the best approach for withdrawals.
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When it comes to making withdrawals from your RESP, timing is key. It's wise to plan your Educational Assistance Payments (EAP) withdrawals during the years when your child's income is at its lowest.

For many 18-year-olds, their income isn't typically substantial, resulting in minimal or no tax obligations on the taxable portion of RESP withdrawals.

However, there are exceptions. If your child took a year off to work and earned income or is involved in a well-paying medical school residency, RESP withdrawals could introduce tax implications.

In such cases, an essential RESP withdrawal tactic involves specifying the type of funds you're withdrawing. You have the flexibility to choose between contributions and grant money.

If you foresee that your child will earn a significant income before fully utilizing their RESP, a smart approach might involve initially withdrawing income and grant funds, especially during years when their income places them in a lower tax bracket.

Hence, it's prudent to explore tax-planning strategies before proceeding with RESP withdrawals, ensuring you make financially savvy decisions. Remember, the goal is to ensure that you utilize the entire RESP while your child is attending school. Failure to do so may result in additional taxes when the RESP is closed.

If your child chooses not to immediately enroll in post-secondary education after high school, there's no need to worry. An RESP will remain active for up to 36 years, granting them the flexibility to pursue college, university, trade school, or other educational programs at a later time.

And that's not all – the RESP can help with apprenticeships and programs too, supporting your child's educational journey.

When considering how to manage your Registered Education Savings Plans (RESPs) with multiple children in the picture, you have some important choices to make. At the time of setup, you can either opt for individual RESP plans for each beneficiary or choose the more strategic approach of establishing a family RESP plan with all your children named as beneficiaries.