How to Claim the Canada Training Credit (CTC)
If you’ve spent money to upgrade your skills, you can reduce your tax owing with the Canada Training Credit. One of the newer and lesser-known tax credits, the Canada Training Credit lets working Canadians claim eligible training fees when they file their income tax return. But what is the Canada Training Credit, and who can make a claim? I’ll answer those questions and more in this guide to the Canada Training Credit.
What Is the Canada Training Credit?
The Canada Training Credit (CTC) is a refundable tax credit designed to help Canadians cover eligible training expenses, including tuition and other fees paid for courses you take during the year.
Who Can Claim the Canada Training Credit?
According to the CRA, if you meet all of the following six conditions, you may be eligible to claim the Canada Training Credit:
- You were a resident of Canada throughout the year
- You file an income tax and benefit return for the year
- Your Canada Training Credit limit is above zero
- You were at least 26 years old and younger than 66 years old at the end of the year.
- The tuition and fees can also be claimed through the existing tuition tax credit.
- Tuition or fees were paid to an eligible educational institution for courses taken during the year you are claiming the credit for or certain bodies for an occupational trade or professional examination.
What Is Considered an Eligible Educational Institution?
For the purpose of claiming the Canada Training Credit, an eligible institution can be a university, college, or other institution providing courses at a post-secondary level in Canada. The list of eligible private institutions is long, but you can view the full list on the Government of Canada website.
Eligible Tuition Fees
Eligible tuition fees can include the following:
- admission fees
- Fees for the use of the library or laboratory facilities
- exemption fees
- charges for a certificate, diploma, or degree
- membership or seminar fees related to an academic program and its administration
- mandatory computer service fees
- academic fees
- examination fees required for a program of study (includes re-reading charges)
- application fees (providing the student enrolls in the institution)
- confirmation fees
How Much Can I Claim Under the Canada Training Credit?
If you qualify for the Canada Training Credit, you can claim the lesser of these two amounts:
- Your Canada Training Credit Limit (CTCL) for the tax year.
- 50% of eligible tuition and other fees are paid to an eligible educational institution in Canada.
The expenses must have been accrued in the year you are claiming the credit.
The Canada Training Credit is a refundable tax credit. If the credit amount exceeds the amount of income tax you have owing, you may receive a refund.
How Is the Canada Training Credit Limit Calculated?
The annual credit limit is $250 for any year in which you qualify. Unused amounts can be carried forward to future years, up to the $ 5000 lifetime maximum.
Where Can I Locate My Canada Training Credit Limit (CTCL)?
You can locate your Canada Training Credit Limit on your most recent Notice of Assessment (NOA) or Reassessment, along with your RRSP or TFSA contribution limits. If the Canada Revenue Agency determines you are eligible, they will add $250 to your overall limit, up to a lifetime maximum of $5,000.
Canada Training Credit vs. Tuition Tax Credit
The difference between the Canada Training Credit and the Tuition Tax Credit is that the tuition tax credit is non-refundable. That means that if the credit amount exceeds your tax amount owing, you won’t get a refund for the credit. You can, however, transfer unused tuition amounts to future years. You can also transfer unused amounts to an eligible family member, like a spouse or common-law spouse, parent, or grandparent.
What’s the Best Way to Claim My Canada Training Credit?
If you are tuition or other eligible fees to claim against the Canada Training Credit, you will make a claim when you file your annual income tax return. You can pay a tax professional to prepare and file your return, or you can file your own taxes using a tax return software program, like TurboTax or Wealthsimple Tax.
Final Thoughts on the Canada Training Credit
If you’ve spent money on tuition or other training expenses during the year, it’s worth your time to find out if you can claim the Canada Training Credit. You may save hundreds of dollars at tax time, mainly if your credit limit includes unused room from previous years.