CRA & Revenu Québec, Credits & Deductions, Education, Families, Getting Organized, Tax Basics, Tips & Advice, Uncategorized

Students: What You Need To Know When Filing Your Taxes

There are many tax credits and tax deductions available for students.  Even if you have little or no income, you should still do your taxes to get the benefit payments you’re entitled to.

Here are the top tax credits and deductions for students according to the Canada Revenue Agency.

Tuition

You may be able to claim the tuition tax credit if you attended certain post‑secondary educational institutions.

Eligible Tuition Fees

You are eligible for a tuition tax credit if;

  • The course is taken at a post-secondary institution in 2018
  • You are a Canadian Resident
  • You are over 16-years-of age at the end of the year that the course was taken
  • The course develops or improves skills in an occupation
  • The educational institution must be certified by Employment and Social Development Canada.

Also eligible are fees paid by a student to a post-secondary educational institution in Canada or fees paid by a deemed resident of Canada to a post-secondary educational institution outside Canada, for courses which are not at the post-secondary school level.

Ineligible Fees

Fees paid by someone else are not eligible to be claimed, such as:

  • Paid or reimbursed by your employer, or an employer of one of your parents, and where the amount is not included in your or your parent’s income
  • By a federal, provincial, or territorial job training program, where the amount is not included in your income
  • Paid, or eligible to be paid fees, under a federal program to help athletes, where the payment or reimbursement has not been included in your income

Examination Fees for Licensing or Certification: Eligible

Examination fees paid to an educational institution, professional association, provincial ministry or other similar institution in order to take an occupational, trade or professional examination which is required to obtain a professional status, or to be licensed or certified as a tradesperson, which would then allow you to practice the profession or trade in Canada.

Ancillary Fees – Supporting activities or operation of an organization, institution or industry: Ineligible, Unless…

Ancillary fees or charges exceeding $250 which are paid in respect of an occupational, trade, or professional examination are not eligible tuition fees unless they are required to be paid by all individuals taking the examination.

Record Keeping

You should be provided with a receipt to substantiate your eligible exam fees.  Keep the receipt!  Keep all receipts!!

Completing Your Tax Return

Enter the amount of your tuition in field 320 of Schedule 11.

Transfer or Carry Forward

Depending on how much tax you owe, you may need to use some, or all, of your credits, so if you don’t need them all, you have the option to transfer them to someone else or carry them forward for your use in the future.

Transfer: Unused amounts can be transferred to your spouse or common-law partner, a parent, grandparent, or the parent or grandparent of your spouse or common-law partner to reduce their taxable income.

Carry Forward: You can also carry forward for a future year the part of your 2018 tuition amount you can’t use and have not transferred for the year. Keep in mind, however, that once you carry it forward, you then can’t transfer it.

Scholarship Exemption

Qualifying Students may be able to claim the scholarship exemption for scholarship, fellowship and bursary income.

A post-secondary program that consists mainly of research is eligible for the scholarship exemption, only if it leads to a college or CEGEP diploma, or a bachelor, masters or doctoral degree (or an equivalent degree). Post-doctoral fellowships are taxable.

To claim a scholarship exemption, you must be enrolled in an educational program in which you are a qualifying student in 2017, 2018 or 2019.

If you are considered a full-time qualifying student for 2017, 2018 or 2019, post-secondary school scholarships, fellowships and bursaries received are not taxable up to the total amount required to support you in the program. Consideration must be given to: the duration of the program; any terms and conditions that apply to the award; and the period for which support is intended to be provided by the award.

If you have received a scholarship, fellowship, or bursary related to a part-time program for which you are a part-time qualifying student for 2017, 2018 or 2019, the scholarship exemption is equal to the tuition paid plus the costs of program-related materials.

Keep in mind, however, that prizes and awards received as a benefit from your employment or in connection with a business are not eligible for the $500 tax-free amount.

 

Other Deductions

  1. Education and textbook amounts– Even though these amounts can no longer be claimed, you can still carry forward any amounts you didn’t claim in previous years.
  2. Interest paid on your student loans– You may be able to claim an amount for the interest paid in 2018 on your student loan for post-secondary education. You can also claim interest paid over the past five years if you haven’t already claimed it. It must be interest paid on a loan received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Canada Apprentice Loans Act, or a similar provincial or territorial law.
  3. Public transit amount– No longer available.
  4. Eligible moving expenses– If you are a full-time student and moved for your post-secondary studies, you may be able to claim moving expenses. You can deduct these expenses only from the part of your scholarships, fellowships, bursaries, certain prizes, research grants, and artists’ project grants that you have to include in your income.  To be eligible, your new place of residence must be at least 40kms closer to your new school.
  5. Child care expenses– If you pay someone to look after your child while you go to school, earn income or conduct research, you may be able to deduct these eligible child care expenses:
    • Caregivers providing child care services
    • Day nursery schools and daycare centres
    • Fees for child care services offered through educational institutions
    • Day camps and day camp schools where primary focus is child care
    • Boarding and overnight schools, or camps where lodging is involved
  1. Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit– If you are turning 19 before April 1, 2019, you may be eligible for the GST/HST credit and any related provincial payments. Upon filing your tax return, if eligible, the CRA will notify you.
  2. Canada Child Benefit (CCB)– If you have a child, you may be eligible for the CCB, which is a tax-free monthly payment. To get this benefit, you only need to apply once and do your taxes every year to keep getting your CCB payments.
  3. Working income tax benefit (WITB)– If you are a student with a dependant and have a modest working income, you may be eligible, and may be able to apply for advance payments.
  4. Learning Disability – If you or your child has a learning disability, you may be able to deduct the costs of primary education and tutoring services as medical expenses. In order to deduct the cost of school, a medical practitioner must certify, in writing, that the equipment, facilities or personnel specially provided by that school are needed because of you, or your child’s, physical or mental impairment.
  5. Tutoring – In order to deduct the cost of tutoring services for you or your child, the CRA would need a letter from a medical practitioner stating that the tutoring is necessary because of a mental impairment. Eligible tutoring services must be paid to a person in the business of providing these services to individuals and the tutor must not be related to you or your child.
  6. Climate Action Incentive payment – If you are a resident of Saskatchewan, Manitoba, Ontario or New Brunswick, you may be eligible for the proposed Climate Action Incentive payment when you file your 2018 tax return.  Residents of rural areas receive an additional 10%. The CAI payment will first reduce any balance owing for the year, then may create or increase any refund to which you may be entitled.

Amounts to Claim

Each year, for each child, you could claim up to:

  • $8,000 for children under age 7
  • $5,000 for other eligible children aged 7 to 16
  • $11,000 for children who qualify for the Disability Tax Credit

Remember to keep any receipts or documents related to you or your child’s schooling and tutoring services in case the CRA asks to see them after you file your tax return.

The easiest way to do this is is to let TurboTax walk you through what you may be entitled to, so that come tax time, you have the opportunity to maximize your deductions.

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