Student life can be expensive. Between tuition, books and living expenses, there is often not enough money to go around. To ease the burden, there are many specific tax credits and deductions that can reduce your taxes.
The Tuition, Education and Textbook Amounts
Please note that the education and textbook amounts are no longer available starting in 2017. The information provided is for individuals who are doing tax returns for 2016 or earlier.
Along with the tuition you pay, you may also be entitled to additional credits known as education and textbooks amounts. These credits are non-refundable which means it can lower your taxes as far as zero, but is not refunded to you if you do not have taxes to pay. It applies to students who attend post-secondary institutions in Canada. The credit is composed of three parts that are grouped together in Schedule 11 of your tax return:
- The tuition amount is the actual amount of tuition fees that you paid.
- The education amount is the number of months where you attended school multiplied by $400 for full-time students and $120 for part-time students.
- The textbook amount is the number of months where you attended school multiplied by $65 for full-time students and $20 for part-time students.
Your educational institution provides you with a tax slip indicating the number of months in which you were enrolled for the year. If your income is not high enough to use all of your tuition, education and textbooks amount while you are a student, the unused portion carries forward until you need the credit.
The Public Transit Amount
Please note that the Public Transit Amount is no longer available after 2017. The information provided is for individuals who are doing tax returns for 2016 or earlier.
The public transit amount is another non-refundable tax credit. To claim it, you must calculate the amount you paid for monthly passes on buses, subways, trains and other forms of transit. While some short-term passes are eligible in limited circumstances, the credit usually only applies to monthly passes that allow unlimited travel. You must keep your proof of payment.
Interest on Student Loans
Interest paid on student loans can also give rise to a non-refundable tax credit. To be eligible, you must have received the loan under an official federal or provincial government program.
As a student, only you can claim an amount for the interest paid on your eligible loans. You can claim the interest in the year you paid it or in the next five years. As such, if you have little or no tax payable in a year, it may be advantageous to wait to claim it in the future.
If part of your income comes from fellowships, bursaries, prizes and research grants, and you are paying taxes on these amounts, you may be entitled to deduct your moving expenses from them.
To be entitled to this deduction, you must be a full-time student in a post-secondary institution in Canada or elsewhere, and your new home must be at least 40 kilometres closer to your school than the previous one. If that is the case, many moving expenses are deductible, such as transportation, storage costs, travel expenses and temporary living expenses.
Child Care Expenses
If you attend an educational program at a secondary school or post-secondary educational institution, you may be eligible to claim a credit for child care expenses. These include fees paid to day care centres, nursery schools and many others. Full-time and part-time students can claim these amounts.