RESPs for electricians: What Qualifies?
Yes, your Registered Education Savings Plan (RESP) can be used to fund eligible electrician apprenticeships and trade school programs, as long as they are offered at an eligible school in Canada (or abroad).
While your child is enrolled in a qualifying post-secondary education program, they’ll be able to withdraw education assistance payments (EAPs) from their RESP account to fund education-related expenses, including tuition, tools, rent, and more.
With an Embark RESP, families can fund any approved post-secondary path, including electrician apprenticeships, while we handle grant applications and walk you through withdrawals when the time comes.
Are electrician apprenticeships and trade schools considered RESP-eligible programs?
The great thing about RESP funding is that it isn’t solely for traditional universities. There are many career paths, including electrical apprenticeships, trade schools, and college programs that qualify. The only requirement is that these eligible programs are offered by a designated educational institution as per the Canadian government. You can check whether your child’s school is eligible by looking at the list of government-certified schools online.
By ensuring eligibility, your EAPs, which consist of both government grant money and investment growth, can be withdrawn from your RESP account and used to pay for approved educational expenses. Without confirmation, withdrawing EAPs for post-secondary education can trigger grant repayments.
What costs can you cover while training?
Registered education savings plan (RESP) withdrawals can be separated into two categories: EAPs (grants and earnings) and contributions (capital).
While enrolled in post-secondary college, university, or trade programs, your student’s EAPs will cover:
- Tuition and other school fees.
- Required textbooks and supplies.
- Reasonable living costs like rent, residence fees, groceries, and more.
Should your child’s electrical program require tools or equipment, they may also be eligible for EAP money. Make sure to keep your receipts as documentation for your provider.
Proof you’ll need to release funds from your registered education savings plan
RESP providers require documentation before EAP funds are released. You’ll typically need to submit the following:
- Completed RESP withdrawal form.
- Proof of enrolment.
Withdrawal strategy and first 13-week limits
When your child’s apprenticeship or program starts, there are caps on EAP withdrawals within the first 13 weeks:
- Full-time students: $8,000 cap.
- Part-time students: $4,000 cap.
After this initial 13-week period, withdrawals for full-time students are capped only by the annual CRA limits. If there is a 12 month period when the child is not enrolled in a qualifying educational program for 13 consecutive weeks, the $8,000 maximum applies again.
RESP funding strategy
For upfront costs, consider using your contribution withdrawals. This money can be used to cover large deposits and other non-education expenses. Afterward, EAPs should be timed to support ongoing expenses. This strategy will help you maximize your cash flow and government grants.
Because apprenticeship schedules often involve on-and-off periods of in-class training, Embark’s RESP specialists can help map out a withdrawal plan that respects the 13-week reset rule and keeps your grants intact.
Maximize grants for trade paths
To make the most out of your CESG, you’ll want to:
- Contribute $2,500 per year, per beneficiary to earn up to $500 in CESG (up to $7,200 in lifetime).
- If you miss a year, catch up on your contributions by depositing up to $5,000 to receive up to $1,000 in CESG.
- Students from low-income families may also qualify for the Canada Learning Bond (CLB). This government grant offers up to an additional $2,000 per beneficiary, with no need to add any money to the RESP.
Keep in mind that tracking contributions is crucial. Stay under the $50,000 lifetime limit per beneficiary to avoid the 1% monthly excess penalty.
Taxes and avoiding clawbacks
EAPs are generally taxed at a lower rate for students, since they earn little to no income while in school. However, many students work while in school and are taxed on the EAP. Apprentice programs may also earn income and therefore be subject to taxes.
Capital withdrawals are not taxable and can be used for any approved costs.
To avoid government grant clawbacks, don’t request EAPs until your child can prove their enrolment.
FAQs
Can RESP money be used for rent and other living costs while enrolled?
Yes. While enrolled in a certified institution and an electrician program, EAPs can cover reasonable living costs, including rent, on-campus housing, groceries, and other expenses.
Who reports RESP withdrawals at tax time—the apprentice or the parent?
EAPs (grants and investment earnings) are reported by the apprentice/student. Contributions are not reported at all, seeing as you’ve already paid taxes on this money.
How can families confirm a specific trade school or program is RESP-eligible?
If your child wants to attend a particular school that is not a university or college, you can check eligibility using an online government list. This list will also confirm whether the specific program is eligible.
Does Embark support RESP withdrawals for apprenticeship programs?
Yes — Embark supports withdrawals for any RESP-eligible post-secondary program, including electrician apprenticeships, trade schools, and union training programs across Canada.
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