In 2017, the province of Ontario eliminated tax credits for tuition and education. This post talks about the changes and what they mean for students in 2017 and beyond.
Tuition and Education Tax Credits
Prior to 2017, Ontario offered students a provincial tax credit for tuition and education. The tuition credit varied based on the amount of tuition paid, but the education credit was a set monthly amount with one-rate for full-time students and another rate for part-time students. As of 2015, part-time students receive $159 per month while full-time students receive $531 per month.
For example, if you attended school part-time for three months and full-time for nine months, you multiply the part-time amount of $159 by three and the full-time amount of $531 by nine. The result of these calculations is $477 and $4,779, and when you add these amounts together, you get a credit of $5,256.
The tuition and education credits are only available for part of the 2017 tax year, and have been eliminated for 2018 and beyond.
How to Claim Education and Tuition Tax Credits in Ontario
TurboTax makes it easy for students to claim all the credits their eligible for. TurboTax Standard’s easy step-by-step guidance and EasyStep interview will ask simple questions about your tax year and automatically search more than 400 tax credits to ensure you get your maximum refund.
If you are using TurboTax Download Free or Basic (which use CRA forms) to calculate your education and tuition credits, use Schedule ON(S11) and transfer the relevant numbers to line 5856 of Form ON428. To complete Schedule ON(S11), you need a copy of your current federal tax return and your notice of assessment from last year.
Unused Credits
- Ontario’s education and tax credits are non-refundable, meaning they cannot create a tax refund.
- They can only lower the amount of provincial tax you owe.
- If you cannot use all of your education and tax credits, you can transfer them or carry them forward.
- After 2017, you can carry forward your unused tuition amounts, but you can’t transfer or claim new amounts.
Transferring and Carrying Forward Unused Credits
For the 2017 tax year or earlier, you may transfer unused credits to your parents or grandparents, your spouse or common-law partner, or the parents or grandparents of your spouse or common-law partner. Alternatively, you can keep the unused credits and carry them forward for future use. Every year after, you’ll claim your unused tuition, and each year it will be used to lower or eliminate, until the amount reaches zero.
For example, if you qualify for $3,000 in education and tuition credits but you only owe $2,000 in tax to Ontario, you may carry forward or transfer the unused $1,000.
You can only transfer amounts in the first year they are claimed. Once you carry forward an amount, you can no longer transfer it. So, for 2018 and later, you can only carry forward amounts you claimed in 2017 or earlier.
Important for 2017
When you are filing your 2017 tax return, you may still claim the tuition and education credits. However, you can only include eligible tuition paid up to or on Sept 4, 2017, and you may only claim the Education Tax Credit for January through August. If you have credits you cannot use on your 2017 return, you can still carry them forward or transfer them as usual. For example, if you attended school full-time for all 12 months of 2017, you could only claim the education credit for the first eight months of the year.
Other Financial Help for Ontario Students
Though the tuition and education credits have been eliminated, Ontario still offers assistance to students in the province though the Ontario Student Assistance Program (OSAP). OSAP offers a mix of grants and loans and is used by thousands of students each year.
There are a variety of other ways that students can get help paying for their education. You can see a list of them on the Ontario government website.