Student’s Guide to Understanding Tax Credits

Whether you’re a freshman or a recent grad, post-secondary students are eligible for a number of tax credits. To make sure you’re claiming everything you’re entitled to, let’s explore some common student credits.

Tuition/Education/Textbook Amounts 

If you attended a qualifying university or college, there’s likely a good sized credit waiting for you at tax time. In addition to receiving a credit for the actual amount of tuition paid, 2016 marks the final year you may also be entitled to a credit just for being in post-secondary. Although some exceptions apply, most university students can claim a credit equal to the number of months they attended school in the calendar year – freshmen for example generally claim 4 months (Sept-Dec) while 2nd and 3rd year students claim 8. Don’t worry about tracking down the figures. Your school will issue a T2202A slip (Tuition, Education, and Textbook Amounts Certificate) to you. Look in your online student portal at the end of February for your copy.

The T2202A has all the info you need to claim your tuition/education/textbook credits. In addition to the tuition amount, the proper number of months and student status (f/t or p/t) also appear on the slip. If your parent is preparing your return for you, he/she will need the slip at tax time.

So now you have a load of credits to apply. As a student studying hard all hours of the day, chances are your income isn’t overly large and you won’t use all of your school related credits while you are still a student. Thankfully, you have options. You can either carry forward (“bank”) the credits you don’t use or transfer a portion to a parent/spouse. The choice is yours. If you choose to carry forward your unused amounts, they won’t expire. They’ll just sit in your unused credits pile with the CRA for future years when your education pays off and you’re making more money. If you choose to transfer some of your excess credits to a parent (or spouse), there are a couple of things to remember:

  1. The transfer must take place in the year the credits are earned. In other words, you cannot transfer any of your past unused amounts to anyone – they belong to you. Let’s say you attended a one year community college program in 2015 and ended up with $4,000 in unused tuition/education/textbook credits. When you file your 2016 return in the spring, that $4,000 cannot be transferred to a parent or spouse. It’s yours and yours alone.
  1. If you choose to transfer a portion of your tuition/education/textbook credits to a parent or spouse, your tax return must indicate the transfer. The transferee will need some details and line numbers from your return to take the transfer so it’s a good idea to prepare your return first.

Student Loan Interest 

If you’re done school and have a student loan, the interest you pay is also a deduction. Only eligible loans qualify (not student lines of credit, etc.). You’ll receive a statement from the loan program listing the interest for the year. If you have no tax payable and don’t need the interest credit, you can bank the amount for up to 5 years.

Other Credits and Deductions 

You may also have other amounts to claim including:

  • Public transit (monthly bus passes),
  • Medical expenses including insurance premiums you may have paid to the school,
  • Child care expenses,
  • Caregiver, family caregiver, disability amounts.