If you’re a university or college student and have claimed tuition credit in the past, you may have been allotted a bit extra at tax time, over and above your tuition. The education and textbook credits offered additional tax relief for qualifying students. On January 1, 2017, both the education and textbooks credits were eliminated at the federal level. If you’re a post-secondary student or have unused education/textbook credits, here’s what you need to know.
Prior to 2017
If you were a post-secondary student in the past, your tuition delivered more bang for your buck at tax time. Education and textbook credits were extra tax credits allotted to qualifying full and part-time students. The amount of each credit depended on the number of months you attended school in the tax year and your enrollment type. If you qualified as a full-time student, you received a total of $465 for each month of the tax year you were enrolled. Qualified part-time students received $140/month. Your tuition slip listed the number of months you were eligible for both credits.
2017 and Beyond
The good news is that the credit for tuition itself hasn’t changed. The rules for claiming tuition expenses have remained untouched.
Because the majority of students have fairly low incomes, all or part of your tuition, education and textbook credits were “carried forward” because you didn’t need them at the time. Your unused amounts stay attached to you until you need them to lower your tax payable. If you have leftover tuition, education and textbook credits, no need to worry. All of your remaining balance of credits remain intact. Although the education and textbook credits have disappeared as of January 2017, any carried forward credits from years’ past are still yours to keep.
The elimination of these credits may have an effect on others besides the students themselves. If you’re a parent of a post-secondary student, the amount of tuition your child can transfer to you may have just dropped too. Without the extra amounts for education and textbook credits, your child may not have enough tuition to allow a transfer.
The elimination of the education credit also brings some minor wording changes to other tax laws. For example, prior to 2017, the Canada Revenue Agency (CRA) used your eligibility to claim the education credit as a qualifier for the scholarship exemption. Now that the education credit has ended, CRA has introduced the term “qualifying student”. The rules for scholarship exemption haven’t changed though – just the wording.
Although federal education and textbook credits have ended, different provinces have taken different action toward the provincial credits. For example, the Ontario government ended its education and textbook credits as of September 2017 while PEI and Alberta have opted to keep both credits at the provincial level, at least for the time being. Check your province’s stance on education and textbook credits by reviewing the latest provincial budget.
References & Resources