Withdrawing from an RESP

Source of funds

Government grants (CESG, CLB, QESI) and investment growth

Beneficiary’s enrollment status

Enrolled in a post secondary program at a qualifying institution

Key details

When making this type of withdrawal, the combination of growth and grants is run through a formula to determine how much of each is withdrawn. It is not possible to request only the growth, or only the grant amount.

EAPs can be withdrawn by either the beneficiary (the child), or the subscriber (the account holder and contributor). The amount withdrawn is considered “income” for the recipient, and will be taxed as such.

EAPs are limited to $8,000 for the first 13 weeks of studies (usually the first semester) for full-time students, with no restrictions on withdrawals after this time period. For part-time students, EAPs are limited to $4,000 each consecutive 13 week period.

For more information on this limit, please refer to the government of Canada’s guidelines.

Withdrawal process

To request an EAP withdrawal, follow these steps:

1. Complete the RESP Withdrawal Request form and upload it to your account. Under the Document Type section, select “Letter of Direction”
• This form needs to be hand-signed. You can upload a clear photo or scanned image
2. Upload a “Proof of enrollment” document. A proof of enrollment document must:
• Be obtained from the post-secondary institution
• Be within 6 months old
• Include the student’s full name
• Include the program’s name, start date, end date, total duration, and current year of study
• Indicate whether the program is full- or part-time
3. If there isn’t one already on file, upload the void cheque or direct deposit form for the beneficiary’s bank account

Note: if choosing to have the funds withdrawn to the subscriber’s bank account, a Letter of Direction (LOD) must be uploaded to the subscriber’s Questrade account. The LOD must include:

• The date
• Full names of the subscriber(s) and beneficiary
• A message stating that the beneficiary gives their consent for this withdrawal
• Signatures of the subscriber(s) and beneficiary

Source of funds

Contributions only

Beneficiary’s enrollment status

Enrolled in a post secondary program at a qualifying institution.

Key details

PSE withdrawals can be made to either the beneficiary or subscriber, with no limitations of how much to withdraw. Because this type of withdrawal is removing the initial contributions, it is not taxed to either the beneficiary or the subscriber at the time of withdrawal.

Withdrawal process

To request a PSE withdrawal, follow these steps:

1. Complete the RESP Withdrawal Request form and upload it to your account. Under the Document Type section, select “Letter of Direction”
• In the “Notes” section of the form, indicate that this is a PSE withdrawal
• This form needs to be hand-signed. You can upload a clear photo or scanned image
2. Upload a “Proof of enrollment” document. A proof of enrollment document must:
• Be obtained from the post-secondary institution
• Be within 6 months old
• Include the student’s full name
• Include the program’s name, start date, end date, total duration, and current year of study
• Indicate whether the program is full- or part-time
3. If there isn’t one already on file, upload the void cheque or direct deposit form for the beneficiary’s bank account 

Source of funds

Contributions only

Beneficiary’s enrollment status

Not enrolled in a post-secondary program (or has previously received an EAP, see note below)

Key details

Capital withdrawals are the repayment of all or part of the original contribution made.

This type of withdrawal can only be made to the subscriber’s bank account. Use this withdrawal only if you do not intend to use these funds for post-secondary education of the beneficiary/ies.

Grants received on these contributions will be returned to Employment and Social Development Canada (ESDC), and other provincial grant providers if applicable.

The investment growth may remain in the account unless you are choosing to close the RESP. If the RESP is closed, the investment growth must be donated to the post-secondary institution of your choice.

An alternative to the donation is to leave the RESP account open for at least 10 years, at which point the investment growth can be withdrawn or transferred to the Registered Retirement Savings Plan (RRSP) of the account holder/subscriber.

Note: If your beneficiary has previously received an EAP withdrawal (see above), you may withdraw your initial contribution corresponding to the grants and growth of that EAP withdrawal, and no other funds need to be returned.

Withdrawal process

To request a capital withdrawal, follow these steps:

1. Complete the RESP Capital Withdrawal form and upload it to your account. Under the Document Type section, select “Letter of Direction”.
• This form needs to be hand-signed. You can upload a clear photo or scanned image

 

2. If there isn’t one already on file, upload the void cheque or direct deposit form for the subscriber’s (account holder’s) bank account.

Source of funds

Investment growth only

Beneficiary’s enrollment status

Special circumstances, see below

Key details

An AIP can be made to the subscriber(s) of the RESP if any one of the following conditions are met:

• The payment is made after the year that includes the 9th anniversary of the RESP and each individual (other than a deceased individual) who is or was a beneficiary has reached 21 years of age and is not currently eligible to receive an EAP
• The payment is made in the year that includes the 35th anniversary of the RESP, unless the RESP is a specified plan in which case the payment is made after the year that includes the 40th anniversary of the RESP
• All the beneficiaries under the RESP are deceased when the payment is made
• A 20% withholding tax is applied to AIP withdrawals, unless the funds are transferred to the subscriber’s RRSP account (there must be available RRSP contribution room available for this transfer)

For more information about this type of withdrawal, view the government of Canada’s guidelines for AIPS.

Withdrawal process

To request an AIP withdrawal, follow these steps:

1. Complete the T1172 form
2. Mail in the original copy containing an original signature
3. If there isn’t one already on file, upload the void cheque or direct deposit form for the subscriber’s (account holder’s) bank account

To request to have the proceeds from an AIP transferred to the account holder’s RRSP, follow these steps:

1. Complete the T1171 form
2. Mail in the original copy containing an original signature

Questrade’s mailing address

Questrade Inc.

5700 Yonge Street, Suite 1900

North York, ON

M2M 4K2

If mailing by courier, please include a note to have the delivery person speak to the concierge for access to the 19th floor.