Historically, tuition tax credits have allowed many students breathing room when tax time came but recent changes to the British Columbia provincial budget have significantly impacted the benefits of this exemption.
As stated by the British Columbia government, Budget 2018 eliminated the Education Tax Credit for 2019 and subsequent tax years. While this makes tuition paid in 2019 ineligible for tuition tax credits, unused tuition and education amounts from years prior to 2019 are still available to be carried forward into subsequent tax years. Federally, there are tuition tax credits that you might be eligible for; for more on the Federal tuition tax credits, read our article here.
Claiming Tax Credits in British Columbia
B.C. basic and other tax credits can be claimed when an individual files their T1 Income Tax Return using the British Columbia Tax form (BC428). To assist in filling out this form, the British Columbia government has supplied a Provincial Worksheet to calculate the amounts to enter on Form BC 428.
Claiming Tuition Tax Credits Federally
Luckily, tuition tax credits are available federally, even if British Columbia omitted these from the budget in 2018. A course taken in 2019 at an institution in Canada will (generally) qualify for a federal non-refundable tuition tax credit if it was taken at a qualifying post-secondary education institution or it was taken by an individual 16 years of age or older to develop or improve skills in an occupation. For the latter, it’s required that the educational institution has been certified by the Minister of Employment and Social Development Canada.
Transferring Tuition Amounts
Since there is a limit to how much tuition tax credit can be awarded to an individual, many students utilize the ability to transfer tuition amounts to another qualifying individual in order to make the most of the tax credit. Tuition amounts up to $5,000 can be transferred to the student’s parent, grandparent, spouse or common-law partner, as well as a spouse or common-law partner’s parent or grandparent in order to make the most of the program.
Here are the steps to transferring tuition for tax credits in British Columbia:
- Determine the amount to be transferred, which can be less or equal to $5,000. This amount cannot have been claimed by the student.
- Ensure the student has entered this transferred amount on their federal Schedule 11 form, a form that can be accessed here. As well as the back of the following forms, depending on where the student is enrolled.
- ○ Form T2202, Tuition and Enrollment Certificate
- ○ Form TL11A, Tuition and Enrollment Certificate – University Outside Canada
- ○ Form TL11C, Tuition and Enrollment Certificate – Commuter to the United States
- Enter the total of all federal amounts that each student has transferred to you on the following forms, depending on the transfer recipient’s relationship to the student:
- ○ Spouse or common-law partner: Field 36000 of their Schedule 2
- ○ Parent or grandparent: Line 32400 of their Income Tax and Benefit Return
- Retain supporting documents, including the student’s official tuition fee receipt, in case more documentation is needed when your tax claim is reviewed by the CRA.
Carrying Unused Amounts
In previous years, if your tuition claim exceeded the eligible amount for the student and any tuition transfer recipient, it is possible and always a great idea for a student to carry over the remaining tuition amount to be used in the following years. This strategy can be used for previous years even while tuition tax credits, provincially, aren’t offered in the current year. In fact, many students use this carry-over amount to soften the blow when the student enters the professional world and starts filing taxes as a full-time employee, not a student.
Does Your Tuition Qualify?
Firstly, it’s important to ensure that you, the student, qualifies for tuition tax credits that are claimed for previous years. There are a number of qualifiers that students must fulfill in order to qualify for tuition tax credits (don’t worry, most students are eligible).
- Full-time or part-time student
- Fee is at least $100 paid to a qualifying institution
- A student is 17 years of age or older
- Enrolled at a qualifying educational institution in Canada or abroad
When Does Tuition Not Qualify?
Generally, a part-time or full-time student would not qualify for tuition tax credits if:
- Tuition is paid or reimbursed by the student’s employer
- The tuition is paid by the employer and student attendance is required as part of a job training program
- The post-secondary education is a federal program to help athletes.
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