Your money grows tax-free while it is in your RESP but you don’t get a tax deduction for the money you put into an RESP. The money that your investment earns while it is in the RESP won’t be taxed until money is taken out to pay for your child’s education. Money paid out of the RESP as an Educational Assistance Payment (EAP) is taxed in the hands of the student. Since many students have little or no other income, they can usually withdraw the money tax-free.