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What are the tax implications of a RESP withdrawal?
Tax implications of RESP withdrawal include:
Post-Secondary Educational Capital Withdrawal (PSE):
This is composed of the contributed capital and it is non-taxable to the subscriber.
Educational Assistance Payment (EAP):
This is composed of income growth and grant money. This is taxable to the beneficiary.
Non-Educational Capital Withdrawal (NCW):
This is return of contributed capital to the subscriber if the beneficiary does not pursue a post-secondary education. It is non-taxable.
Please note: NCW will trigger grant repayments back to the government.
Please note that the answers to the questions are for information purposes only for the products discussed. Individual circumstances may vary. In case of discrepancy, the documentation prevails.