How to Claim Tuition Tax Credits In Canada
The cost of post-secondary education in 2022 is high, especially when you consider the many additional expenses students face, like housing, food, and transportation. As a result, students and parents must find ways to reduce the financial burden. Each year, students can do just that when they file their taxes by claiming their eligible tuition fees under the tuition tax credit.
What Is the Tuition Tax Credit?
Did you know? The Canadian government offers a non-refundable tax credit to help alleviate the cost of post-secondary education for part-time and full-time students. You can claim the federal tuition tax credit up to $5,000, and unused portions can be transferred to eligible family members to reduce their tax payable.
Who Is Eligible for the Tuition Tax Credit?
If you are a post-secondary student age 16 or older studying at an accredited Canadian institution, you are eligible to claim the tuition tax credit. You can also apply if you study at a college or university outside of Canada.
If you have excess tuition costs, you can carry them forward to use in a future year or transfer them to a spouse, common-law partner, parent, or grandparent for their use in the current year only.
How the Tuition Tax Credit Works
Suppose you paid eligible tuition fees to an accredited post-secondary educational institution. In that case, the school will issue you a T2202 slip, including the total tuition fees you can claim on your tax return. You’ll find the amount in Box 23 of the form.
Use Schedule 11 of your income tax return to claim your tuition tax credits and determine any unused amount to transfer or carry forward to a future year.
For illustration purposes, let’s assume you have income tax payable of $1500 and eligible tuition fees paid of $3000 (from the official tax receipt – T2202).
Claim $1500 and reduce your tax payable to zero. Because the tuition amount is a non-refundable credit, you cannot claim more than $1500 to receive a refund.
The remaining tax credits must be carried forward to a future year or transferred to your spouse, parent, or grandparent, who can claim them on their return.
Note that a family member cannot claim tax credits carried forward from a previous year. They can only claim unused credits from the current year.
Should I Transfer My Unused Amounts to a Family Member?
If you have unused tuition expenses left over after reducing your taxes owed to zero, you may be wondering what to do with them. Do you forward them to a future year or transfer them to an eligible family member to use in the current year? The answer to this will depend upon your situation.
Many college students have a low income while they attend school, so they may not be required to pay any income tax. In that case, the tuition tax credits aren’t of much use, and you should transfer them to a spouse or parent who earns a higher income and can benefit from the tax credit. If you’re unsure, I highly recommend speaking to an accountant or other tax professional.
List of Ineligible Tuition Fees
Your college or university will include any eligible expenses on your T2202, but if you’re wondering, here is a list of tuition fees you cannot claim under the tuition amount.
- Tuition fees reimbursed by your employer or your parent’s employer and are not included in income.
- Fees paid by a federal, provincial, or territorial job training program and not included in your income
- Fees paid to support athletes and not included in income
Other Ineligible Expenses
The following expenses are not considered eligible tuition fees, so you cannot claim them as a tuition amount:
- Medical expenses
- Student social activities (extracurricular)
- Exam fees
- Administrative penalties, i.e., fee for withdrawing from a course
- Books (exceptions for eligible correspondence courses)
Tuition Credit FAQs
Here are some common questions surrounding tuition tax credits. For more information, visit the CRA website.
What’s the Definition of an Accredited School?
You can claim tuition fees paid to Canadian post-secondary institutions (colleges and universities) and several other specialized educational institutions. Generally speaking, if you are eligible to receive a Canada Student loan where you’re attending, it’s on the list. Here is a master list of qualifying institutions from the CRA website.
Should I Send My T2202 Slip or Schedule 11 to the CRA?
As in most cases, the Canada Revenue Agency does not require you to send them your tuition-related tax slips, as the final amount will be included on your T1 General form. However, make sure you keep them handy if they ask to see them.
Do I Have to Claim All of My Eligible Tuition Amounts?
You must claim your entire tuition amount if you have income tax owing that you can claim it against. You can carry forward or transfer the remaining tuition paid only when you’ve reduced your taxes to zero.
How Do I Find My Unused Tuition Amounts?
If you’re unsure if you have unused tuition amounts from a previous year, you can locate them online via CRA My Account. If you don’t have CRA My Account, check your Notice of Assessment for the prior year, and you will find the amount.
Final Thoughts on Tuition Tax Credits
While every person’s situation is different, if you are studying at an accredited post-secondary school, make sure you claim the tuition tax credit when you file your taxes. Then, carry forward unused amounts to a future year, or transfer them to an eligible family member. You and your family members will save thousands of dollars, alleviating the financial burden of a college education.