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The cost of a post-secondary education is constantly increasing & one of the biggest expenses students face is their tuition fees. To reduce taxes, students attending post-secondary institutions can claim the Tuition Tax Credit. This non-refundable tax credit reduces any taxes the student may have. If you are a student attending, or planning to attend, post-secondary education, we recommend taking advantage of this tax credit.
What is The Tuition Tax Credit?
The Tuition Tax Credit is a non-refundable tax credit that reduces the amount of tax you pay on your taxable income. For example, if you owe $1500 in personal taxes & you have $1000 non-refundable tax credit, you’ll only pay $500 in taxes. You do not get a refund of $500.
To be eligible for the tax credit, students must meet the following eligible tuition requirements:
– Any student over the age of 16 enrolled in a course at a post-secondary institution in Canada
– Full-time study abroad at schools outside Canada in a course lasting at least 3 weeks
– A program developing / improving occupational skills at an non post-secondary institution
Students cannot claim tuition if their employer pays or reimburses their tuition. In order to be able to claim tuition in this circumstance, the employer must include the tuition in the student’s earnings. The same is true if an employer pays tuition to a student’s parent on the student’s behalf.
What Forms Do I Need?
To claim the tax credit, you will need your tuition & enrollment form provided by your school. Form T2200 is issued if you went to school in Canada & TL11A if you went to school outside of Canada. If you did not receive your form contact your school. Be sure to bring these forms in with your tax documents to claim the tax credit on your personal income tax return.
Claiming the Tax Credit
If your tuition is greater than the amount of personal taxes owed, then you can use the tax credit to reduce or eliminate the taxes you owe. Should you not use all the available tuition, you can carry forward to a future year or transfer unused amounts to a partner, parent, or grandparent. When you choose to carry forward, you can carry forward all unused amounts. However, if you choose to transfer unused amounts, the maximin transfer is $5000.
Tax season is fast approaching. If you have questions on the Tuition Tax Credit Contact us to talk to one of our tax experts.