Get a tax credit for your tuition fees

27 April 2019 by National Bank
Tax credit

Canadian students in the workforce could reduce their tax bill. They can claim a tax credit for tuition fees for each year they're in school. Here's how to benefit from this advantageous tax break.

The tuition tax credit applies to all Canadian students, whether they're studying in Canada or abroad—as long as the institution has been approved by the Canada Revenue Agency. Tuition fees must be more than $100. Admission and examination fees are also eligible for the tax credit.

This credit is equal to 15% of the amount the student pays in tuition fees in a year. For example, a student who paid $3,000 in tuition fees would get a $450 credit. This tax credit is non-refundable. It can only be used to reduce or eliminate the student’s tax bill but won’t generate a refund, even if the tax bill is already zero.

How to claim this tax credit

To obtain the tax credit from the provincial government, complete Part A of Schedule T and enclose it with your Revenu Québec tax return. Enter the amount claimed for tuition and examination fees on line 398. You can also claim this tax credit for previous years if you haven't yet done so. You must include proof of enrolment.

For the Canada Revenue Agency, you must fill out Schedule 11 of your federal tax return. You can also claim textbook amounts, but proof of purchases and tuition fees will be required.

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How to transfer your tax credit

If only a part of the tuition fees lets is needed to reduce the student's tax bill to zero, the unused part of the tax credit can be carried forward to the following year. The amount will be calculated automatically when you fill out Schedule 11 of your federal and provincial tax returns.

You can also transfer your tuition tax credit to your parent or grandparent, or your spouse's parent or grandparent. It might be a good choice for you if you're paying little or no tax. The tuition tax credit may be better used to reduce a relative's taxes. In Quebec, you can't directly transfer the tax credit to your spouse.

On your Quebec tax return, indicate the amount you want to transfer in Schedule T and enclose it with your tax return. The person receiving the tax credit must complete Part D of Schedule A in their tax return.

At the federal level, you can transfer a maximum of $5,000. To transfer your credit to your spouse or common-law partner, they must claim it in field 36000 of their tax return. To transfer your tax credit to your parent or grandparent, or your spouse's or common-law partner's parent or grandparent, they must claim it in field 32400 of their tax return.

Reduce your own or your family's tax bill with the tax credit for tuition fees. Read our other tips to pay less tax.

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