Federal education and textbook tax credits were eliminated in 2017. If you collected amounts in the past by attending a college or university before 2017, you can still use those tax credits that you have carried forward; however, you cannot collect new credits at the federal level.
Ontario’s provincial tuition and education tax credits were phased out in the 2016 budget. While other provinces do have these education credits you need to attend school in those provinces to receive them. Provincial textbook and tuition credits are typically not transferable between provinces. So, if you moved to Ontario, you do not get to use the education or textbooks credits that you accumulated in that other province on your Ontario tax return. Federally, there are still tuition tax credits that you might be eligible for; for more on the Federal tuition tax credits, read our article here.
What Were the Ontario Tuition and Education Tax Credits?
If you have not yet completed your taxes for a tax year before 2017, you may be able to collect these tax credits if you incurred the expense up to September 4, 2017. You are eligible for these credits if you were a full-time student or a part-time student at an Ontario college or University. If so, your school likely issued you an informational tax slip detailing how much of a credit you earned each year.
These credits were non-refundable credits. That means that they can lower the amount of tax you owe, but they cannot generate a refund. If you don’t owe any taxes that year, you can’t use any of the tax credit. If you do owe some taxes, your tuition and education tax credit can reduce that amount.
However, as students typically don’t make enough money to get the full benefit of their tax credits in the year that they are issued, unused credits were allowed to be rolled forward or given to your spouse, common-law partner, parents or grandparents. Typically, students transfer the amount to an individual who contributed to their tuition or textbook costs. If tax credits were transferred, you don’t get to roll them forward, but your spouse, common-law partner, parent or grandparent’s taxes payable would have been reduced by the credit amount to a maximum of $5,000.
Claiming Your Education, Tuition and Textbook Amounts Moving Forward
If you choose to roll over the amount to further years, you can no longer opt to transfer the amount to your spouse, parents or grandparents. In order to have these credits at all, you had to claim the amounts and include the rollover or transfer amount in your return that tax year. As you go back and complete your taxes from these past years, you can roll-over the credits and use them to reduce your tax burden now.
You must use these credits as soon as possible, or you may lose them. If you owe personal income tax, then you must use all of the credit you can to reduce it to zero, until you don’t have any education credits left. If you have more education credits than tax owning, you may continue to roll the unused portions forward. However, if you fail to use all of the education credits you could, you cannot roll them forward. In short, you should use what you can as soon as you can.
Other Tax Breaks for Ontario Students
The textbook, tuition and education tax credits were not the only tax credits available to students. You should also look into these tax credits that are commonly claimed by students:
- Interest paid on student loans: The interest that you paid on your student loan can be used to reduce your tax burden.
- Eligible moving costs: If you moved for school or work you may be eligible to claim moving expenses
- Climate action incentive: This is a new tax credit that can benefit students, especially those living in small or rural communities.
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