As a post-secondary student and a Canadian taxpayer, you have four student-based tax breaks available to you.
Tuition Tax Credit
Tuition paid for post-secondary education in Canada may qualify for a tax credit. Any tuition paid outside of Canada also may be eligible, provided that you attend a university full time and enroll in a course of study leading to a degree. You can also apply that tuition tax credit to fees for non-post-secondary occupational skills courses offered at Canadian post-secondary educational institutions in Canada.
If your tax bill is low in a particular year and you don’t need the credit, you can reduce the tax burden of a spouse, partner, parent or grandparent by transferring up to $5,000 of your tax credit to them. Alternatively, you can hold on to the credits and use them next year.
Student Loan Interest Credit
You can carry forward student loan interest from the last five years under the Canada Student Loans Act, the Canada Student Financial Assistance Act and similar provincial or territorial government laws.
The carry-forward amounts are only eligible if they haven’t been claimed previously. Also, interest owed as a result of a judgement for failure to pay back your student loan is excluded.
Moving Expense Deduction
In the case that you move more than 40 kilometres to attend a post-secondary institution full time, you may qualify for a moving expense deduction on the taxable part of scholarships, fellowships, bursaries, certain prizes and research grants.
You can claim multiple moving expenses in one tax year, including the eligible expenses incurred at the beginning of each academic period and those incurred when returning home for summer break.
Look at the tax slip from your educational institution. If Box C — full-time enrollment — includes an amount, you are eligible.
Child Care Deduction
You may qualify to deduct child care expenses if you’re a student and have kids who are under 16 or physically/mentally impaired.
If you’re married or common-law, you can transfer this deduction to your partner. However, if they have a lower income than you do, this might put them into refund. Either way, the deduction can lower your family’s overall income tax burden.
Thinking of going back to school?
Good for you! Education is a wonderful thing and the Government of Canada agrees. Take full advantage of that fact by claiming all your student deductions.
This piece was produced as a part of the quarterly Canadian Overview, a newsletter produced by the Canadian member firms of Moore Stephens North America.