Student Tax Deductions in Canada
Are there student tax deductions that I may have missed?
The deductions that students overlook most often are moving expenses and childcare expenses as well. There are also federal non-refundable tax credits that reduce your federal tax. The ones that apply to most students are the Canada employment amount, the public transit amount, interest paid on student loans and the tuition, education and textbook amounts.
What is the Canada employment amount?
Everyone who was an employee during the year can claim this amount.
How do I claim the public transit amount?
You can claim the cost of public transit passes for yourself, your spouse or common-law partner or your children under 19. If you bought a U-pass as part of your university tuition, your university will give you a separate receipt for the public transit pass.
Under what circumstances can I claim the interest paid on my student loan?
You are the only one who can claim the interest that you or a relative paid on that loan in the current tax year and/or the previous five years. The loan must be from the Canada Student Loans or the Canada Student Financial Assistance programs, or similar provincial or territorial programs for post-secondary education.
Is tuition part of the education tuition tax credit?
You can claim tuition fees over $100 for an education tax credit. For the education amount, you can claim a credit for every month you were enrolled full-time or part-time (conditions apply). In both cases, you must have taken classes at an approved post-secondary institution in Canada or in another country. Finally, you can claim a credit for textbooks for each month you qualify for the full-time or the part-time education amount.
What if I don’t need the total tuition, education and textbook amounts?
First, you have to claim the amounts on your own tax return, but you may not need the whole amount to bring your tax payable to zero. In that case, you can transfer the unused portion of that family tax to one family member - as well as to your spouse or common-law partner - or carry the amounts forward indefinitely.
It is preferable to transfer only an amount that your family member/spouse can use to reduce their taxes and to carry forward the rest for use against your future (higher) income. Even if you have no income to declare, you have to file a return if you want, for example, to carry forward or transfer the unused portion of your tuition, education and textbook amounts or to apply for the GST/HST credit.
How do I get the GST/HST credit?
Are you 19 or over? Then you are eligible to receive the payments four times a year. Just file a tax return and apply for the credit. In addition, you may be able to get provincial or territorial tax credits for low-income Canadians.
I have income from scholarships, grants, student loans or tips. What do I do?
If you are eligible for the education amount, income from scholarships, fellowships and bursaries is not taxable and you don’t even have to indicate it on your return. If you are not eligible for the education amount, report only the part that is over $500. Student loans are completely non-taxable. Research grants are taxable but you can deduct related expenses. Income earned as a teaching assistant is fully taxable. Don’t forget to declare your tips if you work in the service industry.
I heard I can withdraw money tax-free from my RRSPs for my education. Is that true?
Yes, under the Lifelong Learning Plan, you can do so for yourself, as well as your spouse or common-law partner. You will have to repay the amount over 10 years but it can help minimize your student loans.