Plan contribution withdrawals and EAPs with first-13-week limits, estimated student tax, and funding gaps.
It depends which bucket the money comes from. Subscriber contribution withdrawals — the after-tax money put in — are generally not taxable when returned. Educational Assistance Payments (EAPs), which are grants, bonds, provincial incentives, and investment growth, are generally taxable to the student beneficiary, not the subscriber.
EAPs are reported on a T4A slip in the student's name for the year they are received. Because many students have little other income, the tax owing is often low, but that is not guaranteed — a large EAP on top of part-time earnings can still create a bill.
Timing matters as much as buckets. EAPs in the first 13 consecutive weeks of full-time study are capped ($8,000 full-time / $4,000 part-time), and promoters may ask for proof of enrolment or receipts, especially for annual EAP requests above the CRA threshold ($29,459 for 2026 — verify live). Contribution withdrawals do not count toward those EAP caps.
Non-education withdrawals are a different story entirely: grants and bonds generally have to be repaid to the government, and remaining growth may be taxed to the subscriber plus an extra penalty tax unless it qualifies for an RRSP rollover.
How to check this rule
Details that matter
Contributions vs EAPs
Returned contributions are generally not taxable. EAPs (grants, bonds, provincial incentives, growth) generally are, in the student's hands.
T4A slip
EAPs are reported on a T4A slip issued to the student for the year received.
First-term caps
EAPs face $8,000 / $4,000 first-13-week caps and possible receipt reviews above the annual CRA threshold.
Non-school exits
Leaving money for non-education use usually means repaying grants and extra tax on growth.
Example
Example: A student needs $19,500 for the school year. The family takes $8,000 as an EAP in the first term (within the full-time cap, taxable to the student) and $11,500 as a contribution withdrawal (generally not taxable), keeping the T4A for the student's return.
Questions to ask your provider
How much of this withdrawal will be classified as EAP versus contribution return?
Do the first-13-week EAP caps apply to this request?
Who will receive the T4A slip, and when will it be issued?
What proof of enrolment or receipts do you need before paying the EAP?
Would any grant or bond amount have to be repaid on this withdrawal?
Read next
Withdraw RESP money explains the broader decision and links to related tools.