Post-secondary education is expensive, especially with the rising cost of living. That’s why it’s important to take advantage of every perk you get for being in school, like the tuition tax credit. This credit helps students in Canada reduce their income tax bills.
But how much money do you really save when you use the tuition tax credit, and how do you claim it? Read our guide for the details and how to get started.
- If you’re a post-secondary student in Canada, you’re probably eligible for the tuition tax credit.
- By using the tuition tax credit, you can reduce the amount of income tax you have to pay, both now and in the future.
- It’s important to file your student income taxes to take advantage of the tuition tax credit.
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What is the tuition tax credit?
The tuition tax credit is a non-refundable tax credit available to post-secondary students. This means that if you pay for tuition and other educational costs (under certain conditions), you can let the Canada Revenue Agency (CRA) know when you’re filing your taxes, and they’ll lower your tax bill, either now or in the future.
Who is eligible for the tuition tax credit?
Generally, if you’re 16 or older and studying beyond high school, full-time or part-time, you’re eligible for the tuition tax credit. Some details include:
- If you’re studying in Canada, it must be at a designated post-secondary institution or another institution where you’re gaining or upgrading your job skills, like a trade school.
- If you’re studying outside Canada, you must be in full-time courses for at least three weeks.
- Your costs per educational institution must be at least $100.
How much is the tuition tax credit in Canada?
The tuition tax credit is a percentage of your total costs, including tuition and eligible fees. That percentage is equal to the tax rate for the lowest federal tax bracket, which in 2023 is 15%.
How is the tuition tax credit calculated?
To calculate the tuition tax credit for the 2023 tax year, take the total eligible tuition amount and multiply it by 15%. (Your eligible costs include tuition and applicable fees, and you’ll get the total when you receive your T2202 Certificate or other paperwork from your educational institution.)
If your total eligible costs were $1,000, here’s how you’d do the math:
$1,000 x 15% = $150
Then, you can apply that $150 to the income tax you owe.
If you don’t have enough employment income to make full use of your tuition tax credit, you can carry the amount forward to future years or transfer it to a spouse or other eligible family member (like your parents), the maximum transfer for the current year is $5,000.
Your educational institution should issue you a form outlining your eligible costs. For Canadian institutions, this form is called the T2202 Certificate, and your school should issue it automatically. If you’re studying outside of Canada, you’ll receive a TL11A, TL11C or TL11D, and you’ll probably have to ask your school to provide it.
Let’s say Min-Seo attends university. Her total tuition costs for 2023 (as shown on the T2202 Certificate or other documentation) were $5,000. She’d simply multiply that by 15% to calculate her tuition tax credit:
$5,000 x 15% = $750
Min-Seo can then claim the $750 tuition tax credit when she files her taxes.
Note that the tuition tax credit is non-refundable, so she can only apply it to the income tax she owes or have already paid on her employment income.
What is excluded from the tuition tax credit?
Some education costs can’t be claimed as part of the tuition tax credit. These costs include:
- Transportation and parking
- Fees for extracurricular activities
- Classes that don’t count as post-secondary education, such as high school upgrade courses
Also note that if someone (like an employer, a government program, or your parents’ employers) reimburses your tuition costs, you can’t claim them on your taxes.
Don’t worry about scholarships and bursaries, though—they don’t count as reimbursement.
What is a T2202 tax form?
A T2202 Certificate (aka Tuition and Enrolment Certificate) is the official tax form your school in Canada will give you so that you can apply for the tuition tax credit.
Your school should send it to you automatically. This document will outline your exact costs so you can enter them when you file your taxes and claim the tuition tax credit.
If you’re studying outside Canada, the paperwork is slightly different, and you’ll probably have to request it.
How to claim the tuition tax credit
TurboTax makes it easy to claim the tuition tax credit when you file your student income taxes. Here are the basic steps.
- Ensure you have received the T2202 certificate from your educational institution in Canada, or the TL11A, TL11C or TL11D from a school in another country. (As we mentioned above, if you’re studying abroad, you’ll likely have to request this paperwork. Don’t leave it too late!)
- When filing your taxes, enter the tuition amount from your paperwork on line 32300 of your Schedule 11. Indicate your student status in the personal information section and fill in the details from your T2202 or other tuition form for schedule 11.
- If the amount of your tuition tax credit is more than you can apply to your taxes this year, that means you have a remainder. You can also transfer some of this remainder to a spouse or other eligible family member, such as a parent or grandparent, for them to use as a tax credit. In a single year, you can transfer a maximum of $5,000 minus the amount you used to lower your own taxes.
- If there is a remainder after that, then carry forward that amount by filling out the rest of Schedule 11.
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