Tax Credits for Students: How College Students in Canada Can Save
Common Deductions and Tax Credits for Students
The most common tax credits for students, or deductions, are moving expenses and child care expenses.
Moving 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.
Child-Care Expenses
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 for Students
The most common post-secondary nonrefundable tax credits that apply to students are interest paid on student loans, the tuition, education and textbook amounts (prior to 2017), the public transit amount (prior to 2017), and the Canada employment amount.
Interest on Student Loans
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, the Apprentice Loans 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
Beginning with the 2017 tax year, the education and textbook tax credits have been eliminated and will no longer be available for a student to claim, or transfer to a spouse or common-law partner, or to a parent or grandparent. The credits are still available for tax years up to, and including, the 2016 tax year. Unused education and textbook credit amounts that were earned and carried forward from years prior to 2017 will remain available to be claimed in future years.
For 2017 and subsequent tax years, other income tax provisions relying on eligibility for the education tax credit, will instead rely on eligibility as a qualifying student. The tuition tax credit is unaffected by this change.In 2017, the eligibility as a “qualifying student” is extended to individuals enrolled at a university, college or other post secondary institution for courses taken for providing the individual with skills (or improving an individual’s skills) in an occupation. The individual must have attained the age of 16 years of age before the end of the year. As a result, the definition of qualifying educational program is also amended to reflect this change.
For information on the tuition tax credit, see the CRA guide “Income Tax Folio, S1-F2-C2, Tuition Tax Credit” or contact us and we’ll be happy to help you out. 250-744-3854