The cost of post-secondary education is a financial burden for many Canadian students, as well as their families. Tuition fees constitute a large part of the cost of studying. Fortunately, eligible students can claim the tuition tax credit. This non-refundable tax credit is used to offset part of the expenses associated with studying at a college or university by reducing the taxes that students have to pay.
Eligibility for the tuition credit
Generally, all students over the age of 16 who are enrolled in post-secondary courses at a designated educational institution in Canada can claim the tuition credit. Students who continue their studies after high school are normally eligible. Educational institutions outside of Canada are also eligible if the student attends the institution full-time for at least three consecutive weeks.
If the tuition fees are paid or reimbursed by their employer, the student cannot claim the credit, unless the employer includes the amount of the tuition fees in the student’s income. The same is true if the employer pays the tuition fees to a parent on behalf of the student.
For the program to be eligible, the courses must be at the post-secondary level. Courses administered by a trade school may also be eligible. For example, if a student attends university but takes high school equivalency courses in order to prepare for future post-secondary courses, that student may not be able to claim the tuition fee tax credit. tuition for equivalency courses.
Calculating and claiming the tax credit for tuition fees
As this is a non-refundable credit , if the tuition fees exceed the amount of tax payable, the non-refundable credit can be used only to reduce or offset the balance payable. It is not possible to obtain a refund. If you don’t use the full amount, you can carry over unused credits to a later tax year, or transfer them to a spouse, parent or grandparent.
Tuition Credit Documents
Colleges, universities, and other accredited post-secondary educational institutions issue a T2202 Tuition and Enrollment Certificate to certify that a student has completed qualifying courses of appropriate length and is therefore eligible for the credit. tax for tuition fees.
Students eligible for the disability tax credit who are enrolled in a qualifying part-time educational program are entitled to the credit on the same basis as if they were studying full-time. In such a case, the student must provide a written attestation from a doctor confirming an impairment of his mental or physical functions. The student must also complete Schedule 11, which is used to calculate tuition fees.
The education amount and the amount for federal textbooks were eliminated on 1 st January 2017. It is still possible to defer and claim the deduction, if necessary.
Transfer of unused portion of a credit
The unused amount of the tuition credit, which is calculated using Schedule 11, can be transferred to an eligible relative. It is possible to designate a spouse or one of the parents or grandparents (including that of the spouse) as beneficiary of part or all of the amount to be transferred.
The student must designate the person who will receive the transfer and indicate the amount to be transferred, using Form T2202 and Schedule 11. You cannot transfer an amount to parents or grandparents if your spouse requests an amount in your name on lines 30300 or 32600 of their return.
If your parents or grandparents are eligible for the transfer, you must decide which parent or grandparent will claim the deduction for the amount transferred on line 32400 of their tax return. You must enter the transfer from a student to a spouse on line 36000 of Schedule 2, which calculates the amount eligible for the transfer between spouses. Please note that you can only transfer tuition fees for the current year (up to a maximum of $ 5,000). Tuition fees from previous years can only be carried over.
Use of deferred amounts
Unused credit amounts are applied to automatically reduce tax payable. The Canada Revenue Agency (CRA) applies the amount of available tuition carried forward each year to reduce your taxes to zero until they are all used up.