Educational Assistance Payments (EAPs)

Income Tax Act s. 146.1(1), 146.1(2)(g), 146.1(2)(g.1)

What is an Educational Assistance Payment?

Full Time Educational Programs

Part Time Educational Programs

What Expenses Qualify to be Paid by EAPs?

CESG and CLB Not Payable to Non-Resident Beneficiary

What is an Educational Assistance Payment?

An educational assistance payment (EAP) means any amount, other than a refund of contributions, paid out of an education savings plan to or for an individual to assist in furthering their education at a post-secondary level.

Certain conditions must be met for payments to qualify as EAPs. If a payment is made that does not qualify as an EAP, it will then be taxed as an accumulated income payment (AIP).

Educational Assistance Payments are included in the taxable income of the beneficiary. However, the beneficiary may claim personal tax credits and tuition and education tax credits to offset the income.

It may be advantageous to receive EAPs while the student has sufficient tax credits to offset the amount included in income.

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Full Time Educational Programs

The individual must be enrolled as a student in a qualifying educational program at a post-secondary educational institution. A qualifying educational program means a program of post-secondary courses of at least 3 weeks duration, which requires that each student spend at least 10 hours per week on courses or work in the program. A program at a foreign educational institution must last at least 13 consecutive weeks, unless the beneficiary is enrolled on a full-time basis, in which case the duration must not be less than 3 consecutive weeks (13 weeks prior to 2011). Qualifying educational programs include apprenticeships and programs offered by trade schools, colleges and universities.

The maximum EAP amount payable to an individual during the first 13 consecutive weeks of a qualifying program is $8,000, increased from $5,000 as of March 28, 2003. Once 13 consecutive weeks has been completed, there is no limit on the amount of EAPs that can be paid, as long as the individual continues to qualify for the payments. If there is a 12 month period during which the individual has not been enrolled as a student for 13 consecutive weeks, the $8,000 ($5,000 prior to March 28, 2023) maximum will again apply.

Part Time Educational Programs

The individual must be at least 16, and be enrolled as a student in a specified educational program at a post-secondary educational institution. A specified educational program means a program of at least 3 weeks duration, which requires that each student spend at least 12 hours per month on courses or work in the program.

The maximum EAP payable to part time students is $2,500 for each 13 week semester.

What Expenses Qualify to be Paid by EAPs?

The Income Tax Act is not specific in what expenses can be paid using EAPs. The Canada Revenue Agency (CRA) frequently asked questions (FAQ) on RESPs indicates that the amount that can be paid during the first 13 weeks of a full time educational program is the lesser of the actual expenses or $8,000 ($5,000 prior to March 28, 2023). However, there is no legislation that makes this requirement. The legislation requires that the EAP assist the student in furthering their post-secondary education. The promoter, who is responsible for making the payments, is required to ensure that the student is enrolled in a qualifying program, but is not required to collect expense receipts from the student.

CESG and CLB Not Payable to Non-Resident Beneficiary

Canada Education Savings Grant Regulations s. 10(3)

Note that if the beneficiary of the RESP is a non-resident at the time of Educational Assistance Payments, then the CESG and Canada Learning Bond (CLB) portions of the RESP cannot be paid. A beneficiary can be a student at a foreign educational institution and still be considered a Canadian resident in some cases. See our information on Canadian residents.

Revised: September 20, 2024