The most common deductions that apply to students are moving expenses and child care expenses.
You can deduct moving expenses if you move to attend courses as a full-time student or if you moved to start a new job, including summer employment, or to start a business. Your new home must be at least 40 kilometers closer to the new school or place of work than the previous home. Moving expenses can only be deducted against awards, employment or self-employment income.
Parents who are full-time students, or single parents who study full-time, can deduct child care expenses on their tax returns. Part-time students may qualify for partial deductions.
NON-REFUNDABLE TAX CREDITS
The most common post-secondary non-refundable tax credits that apply to students are interest paid on student loans, the tuition, education and textbook amounts, the public transit amount, and the Canada employment amount.
To be eligible for the credit, interest must, in fact, have been paid. The interest must be on a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a law of the province or territory, which governs the granting of financial assistance to students at the post-secondary level. Personal or family loans will not qualify. Credits that are not needed to offset income taxes are available for carry forward for up to five years.
You can only claim interest you have not previously claimed and you cannot claim interest that relates to a judgment obtained after you failed to pay back a student loan.
Tuition, Education, and Textbook Amount
You can claim the education credit of $400 for full time and $120 part time for each whole or partial month in which you were enrolled in a qualifying education program. Disabled part- timers can receive the full credit of $400.\
In addition to obtaining a tax credit for tuition fees paid, this tax credit also covers mandatory fees such as student services, library and lab charges, athletics, certain ancillary fees, computer services, exams, certificates and diplomas. Post-secondary students can claim a textbook tax credit of $65 per month for full-time and $20 per month for part-time studies.
The student has the option of transferring the tuition, education, and textbook amount to a parent, spouse, common law partner or grand-parent if it is not fully absorbed on his or her income tax return. If the student carries them forward, the transferability will be lost. The amount that can be transferred is limited to a maximum amount of $5,000 (or $850 in tax credits) per year.
Please refer to the Canada Revenue Agency guide “P105—Students and Income Tax” for more details.