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Is my daughter eligible to 100% of EAP amounts if she studies in the U.S.?

Can she still receive government grants?

OUR ANSWER

Whether your daughter wants to study abroad for one or several semesters, it’s possible to withdraw funds from her RESP to pay for tuition and other expenses related to studying abroad, such as:

  • Passport
  • Study permit
  • Visa
  • Exchange rate
  • Plane tickets
  • Transportation
  • Housing
  • Groceries
  • Textbooks
  • Educational activities

Residency Status of the Beneficiary

Educational Assistance Payments (EAPs) consist, in part, of government grants. The beneficiary must be a Canadian resident to receive the Canada Education Savings Grant (CESG) and a Quebec resident to receive the Quebec Education Savings Incentive (QESI).

The Canada Revenue Agency (CRA) determines residency status for tax purposes. A beneficiary can study outside of Canada and still be considered a Canadian resident by the CRA, under certain conditions. For further information, call the CRA at 1-800-959-8281. Our customer service can also help you calculate the amounts that will be available for your daughter whether she’s considered a Canadian resident or not.  

If your daughter pursues her education in the U.S. and is no longer considered a Canadian resident, she won’t be eligible to 100% of EAP amounts; she will only receive the income accumulated in the plan. Grants will be returned to the Government of Canada and the Government of Quebec and a 25% tax deduction will have to be remitted to the Receiver General for Canada. An NR4 slip will be sent to your daughter, and she will have to include the sums she received in the income tax return of the country where she resides.

On the contrary, if your daughter is still considered a Canadian resident, she will be eligible to 100% of the EAP amounts, i.e., the accumulated income and the government grants1. Because EAPs are taxed in the beneficiary’s hands, it can be advantageous to withdraw these amounts over several years. An EAP application can be submitted as soon as the beneficiary is enrolled in the current semester and up to six months after ceasing enrolment.   

Reminder: Eligible Studies

As a reminder, eligible studies are general or technical, full-time or part-time (college, community college or university) post-secondary educational programs offered in Canada or the foreign equivalent2.

If the beneficiary studies in Canada, but in a province other than Quebec or New Brunswick, the program must appear as a qualifying educational program in the Government of Canada’s list of designated educational institutions. For studies outside of Canada, the program does not have to appear on this list to be eligible. 

A valid proof of enrolment must be provided to withdraw EAPs. For most educational institutions, all the information that can be provided as proof can be found in the student portal. Here are a few examples of proof of enrolment documents: a class schedule for the next semester, a grades transcript of the previous semester, a certificate of school attendance, an enrolment letter. The document must include this information: the student’s full name, the names of the school and program, full-time or part-time status, and the semester concerned (e.g., fall 2020, winter 2021, summer 2020).

Studying abroad is a very rewarding experience. Your daughter will come back with unforgettable memories! To make sure she enjoys her stay to the fullest, it’s important that she be well prepared. Keep reading to discover useful tips on how to prepare for studying outside of Canada.

SEE ALSO

Legal Notes

1. See which post-secondary programs are eligible in our prospectus. Certain conditions apply. Subject to the withdrawal limits established under the Income Tax Act (Canada).

2. Certain conditions apply. For the complete list of eligible programs, please see our prospectus.