Quick Answer
RESP Educational Assistance Payments (EAPs) are taxable income to the student and not the parent. When a student also has a summer job, co-op placement, or other income in the same year, all of it adds up on their tax return. Your RESP provider reports EAPs in Box 042 on a T4A tax slip, and the student includes this amount on their own tax return for the year received.
Key Takeaways
- RESP EAPs are taxable to the student, not the parent or subscriber.
- EAPs are reported in Box 042 on a T4A tax slip sent to the student.
- EAPs can include government grants, bonds, provincial incentives, and RESP investment growth, not original contributions.
- A summer job, co-op placement, or part-time work adds to the student’s total taxable income and may affect how much tax they owe.
- Contribution withdrawals are different from EAPs — they’re returned tax-free to the subscriber.
- Spreading EAP withdrawals across school years may help manage the student’s annual taxable income.
- Students should keep all tax slips: T4A (Box 042), T4, and T2202 tuition certificate.
When a student heads off to college or university, one of the first questions families have is: how do we use the RESP? At Embark, we help families with this every day — and understanding RESP EAP taxable income is the key starting point. It matters whose tax return the EAP goes on, and how the student’s total income for the year affects the result. This guide explains what you need to know before requesting a withdrawal. When you’re ready to withdraw from an Embark RESP, the process takes just minutes to initiate online, and we keep you informed every step of the way. No branch visits necessary.
What Is RESP EAP Taxable Income?
An Educational Assistance Payment, or EAP, is a withdrawal from an RESP that includes money the government added and any growth the plan earned over time. This includes:
- The Canada Education Savings Grant (CESG)
- The Canada Learning Bond (CLB)
- Any provincial education incentives
- Investment earnings that built up inside the RESP
EAPs do not include the subscriber’s original contributions (the subscriber being the person who opened the RESP — usually a parent or guardian). Those are a separate part of the RESP. EAPs are paid to or for the student beneficiary when they are enrolled in a qualifying post-secondary program. Because EAPs include government money and investment growth — not after-tax contributions — the CRA treats them as taxable income for the student.
For a closer look at how EAPs work within the plan, see What Role Do EAPs Play in RESPs?.
Who Pays Tax on RESP EAPs?
The student — not the parent or subscriber — pays tax on EAPs. Your RESP provider reports the EAP amount in Box 042 on a T4A tax slip and sends a copy to both the student and the CRA. The student then includes that amount as income on their own tax return for the year they received it.
This is one reason families often make EAP payments directly to the student. Because students typically have lower incomes than parents, the EAP may be taxed at a lower rate — or it may be offset by tuition credits and other deductions. But this is not guaranteed. The final tax result depends on the student’s full income picture for the year. When you withdraw through Embark, you choose the EAP amount, which means you can plan around the student’s income and keep things as straightforward as possible come tax time.
How Does Student Income Affect RESP EAP Taxes?
An EAP is added to whatever else the student earns in the same tax year. The table below shows common income types and why they matter when planning RESP EAP withdrawals.
| Income Type | Why It Matters | Keep for Tax Season |
|---|---|---|
| Summer job income | Increases total taxable income for the year | T4 slip |
| Part-time work during school | Adds to income even in months with lower earnings | T4 slip |
| Co-op or paid internship | Can significantly raise income in placement terms | T4 slip |
| Apprenticeship income | Treated as employment income by the CRA | T4 slip |
| Scholarships and bursaries | Some portions may be taxable — full-time students often receive a full exemption; see Box 105 on T4A | T4A slip |
| RESP EAP income | Always taxable to the student in the year received | T4A — Box 042 |
The more income a student has from other sources, the more important it becomes to think carefully about the timing and size of EAP withdrawals.
Does a Summer Job Make RESP EAPs Taxable?
EAPs are taxable to the student whether or not they work during the summer. A summer job does not create the tax obligation — the EAP itself does. But a summer job does add to the student’s total taxable income for the year. When combined with EAP income, this may increase the amount of tax owed.
Students can use tuition credits and education-related deductions to help offset some of that income. However, the results depend on the province, the student’s total income, and available credits. Students should keep all slips and file carefully.
For more on how RESP withdrawals are taxed generally, see Are RESP Withdrawals Taxable?.
Are RESP EAPs Taxed Differently from Contribution Withdrawals?
Yes — and this distinction matters for families planning withdrawals. When a subscriber withdraws their original contributions from an RESP, those funds are returned tax-free. That’s because contributions were made with after-tax dollars and were never deducted from income. So, they can come back out without creating new taxable income for the student or the subscriber.
EAPs work differently. Because EAPs include government grants and RESP growth, they are treated as new income for the student in the year received.
| EAP | Contribution Withdrawal | |
|---|---|---|
| What’s included | Grants, bonds, provincial incentives, investment growth | Original subscriber contributions |
| Taxable to the student? | Yes | No |
| Reported on T4A? | Yes — Box 042 | No |
| Who receives it? | Student (beneficiary) | Subscriber (usually parent) |
Understanding this difference can help families plan which funds to draw from and when. See also: RESP Withdrawal Rules: How to Access Your Education Savings.
Should Families Spread EAP Withdrawals Over Multiple Years?
Spreading EAP withdrawals across the student’s school years may help keep annual taxable income lower in any single year. If a student earns less in first year than in third year, perhaps because of a co-op placement, it may make sense to take more EAP in the lower-income years.
There is no one right answer. The best approach depends on the student’s program length, income patterns, tuition costs, and how much EAP is available. This is worth thinking through before each withdrawal, not just at the start of post-secondary. For more details, visit Withdrawing from Your RESP, or speak with an Embark Specialist.
What If the Student Has Co-op, Internship, or Apprenticeship Income?
Students in co-op programs or apprenticeships may earn significantly more in some years than others. A full-time co-op term can push total income well above what a student earns from part-time work alone. Taking a large EAP in the same year as a high-earning co-op term means more taxable income overall — and possibly a higher tax bill.
Where possible, families may want to plan EAP timing around high-income terms. Taking EAPs during study-only terms, when income may be lower, could help. But every situation is different, and program structure, graduation timelines, and available EAP balance all play a role.
For students managing multiple income sources, How to File Taxes as a Student is a helpful starting point. T4As that are issued to EAPs made from Embark RESPs can easily be accessed online through the account’s student portal. No branch visits necessary.
What Tax Slips Should Students Expect?
Before filing, students should gather all their tax slips for the year. Here is what to look for:
- T4A — Box 042: RESP EAP income from your RESP provider (e.g., Embark)
- T4: Employment income from any job during the year (summer job, co-op, part-time work)
- T4A (scholarships/bursaries): Reported where applicable — check whether the amount is taxable
- T2202: Tuition and enrolment certificate from the post-secondary institution
- Provincial slips: May also apply depending on province or territory
Students should check with their school, employer, and RESP provider to make sure they have received everything before filing. For a broader look at RESP tax rules, see RESPs and Taxes.
What Families Should Check Before Requesting an EAP
Before choosing how much EAP to request, it helps to review the following:
- The student’s estimated total income for the year (including job and EAP income)
- Expected summer job, co-op, or part-time earnings in the same tax year
- Tuition and education costs coming due
- The EAP balance remaining in the RESP
- The contribution balance available (which returns to the subscriber tax-free)
- Whether tuition credits or other deductions may offset EAP income
- Whether another RESP is also making EAP payments to the student
- The timing of the withdrawal and which tax year it falls in
For more on accessing your savings, see How to Get My RESP Money.
Ready to plan your RESP withdrawal?
Planning an EAP withdrawal? Embark can help you understand what to check before choosing an amount.
Common Mistakes with RESP EAP Taxable Income
A few common errors can lead to surprises at tax time. Watch out for these:
- Assuming EAPs are tax-free because the student is in school. School enrolment does not make EAPs non-taxable.
- Reporting the EAP on the parent’s return. EAPs are reported on the student’s return, not the subscriber’s.
- Ignoring summer job or co-op income. All taxable income in the year counts — not just the EAP.
- Waiting until the final year to take all remaining EAPs. This can result in a high-income year with more tax owed.
- Confusing EAPs with contribution withdrawals. Contributions are returned tax-free to the subscriber.
- Losing the T4A tax slip. Keep Box 042 records. The CRA receives a copy as well.
- Forgetting about other income sources, such as a part-time job.
Frequently Asked Questions
Are RESP EAPs taxable income?
Yes. RESP EAPs are taxable income to the student beneficiary in the year they are received. The RESP promoter reports the amount in Box 042 on a T4A tax slip, which the student includes on their tax return.
Who pays tax on RESP EAPs?
The student (the beneficiary) pays tax on EAPs — not the parent or subscriber. The EAP is included on the student’s personal tax return for the year it was received.
Does a summer job affect RESP EAP tax?
Yes. A summer job adds to the student’s total taxable income for the year. When combined with EAP income, the student’s overall income may be higher, which can affect how much tax is owed. The exact result depends on total income, available credits, and province or territory.
What tax slip reports RESP EAP income?
RESP EAP income is reported in Box 042 on a T4A tax slip. The RESP promoter sends this slip to the student after the end of the calendar year.
Are RESP contribution withdrawals taxable to the student?
Generally, no. Contribution withdrawals are returned to the subscriber (usually a parent) and are not taxable, because those funds were contributed with after-tax dollars. They are not included in the student’s income.
For more information, feel free to speak with an Embark Education Savings Specialist.
