Education Tax Credits Guide

Tuition Tax Credit

How It Works

• 15% federal credit on eligible tuition
• Non-refundable (reduces tax to zero)
• Plus provincial credits (rates vary)
• Total savings: 20-25% of tuition

Eligible Tuition Fees

• Tuition paid to qualifying institution
• Fees over $100 for each institution
• Admission, examination, certificate fees
• Mandatory ancillary fees

NOT Eligible

• Student association fees
• Health/dental plans
• Textbooks (federal credit eliminated)
• Transportation, parking
• Board, lodging

Qualifying Institutions

Canadian Institutions

• Universities
• Colleges
• CEGEP
• Certified by ESDC for occupational skills

Foreign Universities

• Full-time courses leading to degree
• Minimum 3 consecutive weeks
• Can use tuition on Schedule 11
• Get TL11A from CRA list

Using the Tuition Credit

Student Uses First

• Must use credit to reduce own tax to zero first
• Cannot skip to transfer or carry forward
• Calculate how much reduces your tax

Transfer to Family

• Up to $5,000 can be transferred
• To parent, grandparent, spouse, or partner
• Only current year amounts
• Complete transfer section on Schedule 11

Carry Forward

• Unused amounts carry forward indefinitely
• Cannot transfer carried-forward amounts
• Use when you have tax to pay
• Track on Schedule 11

Student Loan Interest Credit

How It Works

• 15% federal credit on interest paid
• Only government student loans qualify
• Canada Student Loans
• Provincial student loans

NOT Eligible

• Bank loans/lines of credit
• Private student loans
• Family loans
• Consolidated commercial loans

Carry Forward Rules

• Can carry forward 5 years
• Use when you have tax to pay
• Cannot transfer to anyone
• Report on Line 31900

Education and Textbook Amounts

Federal Status (Eliminated)

• Education amount eliminated 2017
• Textbook amount eliminated 2017
• Unused amounts from before still exist
• Can still use carry-forward balances

Provincial Credits

Some provinces still have education/textbook credits:

• Ontario: No separate credit
• BC: No separate credit
• Check your province's rules

RESP Withdrawals

Tax Treatment

• Original contributions: tax-free
• Government grants (EAP): taxable to student
• Investment growth (EAP): taxable to student
• Student usually has low/no income

Strategy

• Withdraw EAP while student has low income
• Tuition credits often offset tax
• Plan withdrawals over multiple years

Scholarships and Bursaries

Tax-Free If

• Enrolled in qualifying program
• Scholarship for program you're in
• No employment requirement

Taxable If

• Not in qualifying program
• Excess over education costs
• Tied to employment duties

Reporting

• Receive T4A slip
• Report on Line 13010
• Claim exemption on Line 13000

Moving Expenses for School

Students Can Claim If

• Moved 40+ km closer to school
• Full-time student
• Have taxable scholarship/grant income
• Or taxable research grant

Deduct Against

• Scholarship income
• Research grant income
• Cannot create/increase loss

Part-Time vs Full-Time

Full-Time Students

• Enrolled in qualifying program
• Minimum course load (60% usually)
• Full access to credits

Part-Time Students

• Still eligible for tuition credit
• Some provincial differences
• May affect other benefits

Graduate Students

Teaching/Research Assistants

• TA/RA income is employment income
• T4 slip issued
• Tuition credits can offset tax

Fellowships

• Often tax-free if for program
• Check specific terms
• May receive T4A

Transfer to Parents/Grandparents

How Transfer Works

• Student completes Schedule 11
• Designates transfer amount (max $5,000)
• Names recipient
• Recipient claims on Schedule 2

Optimal Strategy

• Transfer to person with highest marginal rate
• If equal, transfer to either
• Consider future carry-forward value

Provincial Differences

Ontario

• 5.05% provincial tuition credit
• Same transfer rules as federal
• Carry forward indefinitely

Quebec

• Different system entirely
• Transferred amounts taxable to parent
• File Quebec return separately

Other Provinces

• Most mirror federal rules
• Rates differ
• Check specific province

Record Keeping

Documents to Keep

• T2202 from each institution
• TL11A/B for foreign schools
• Receipts for tuition payments
• Student loan statements (interest)
• Schedule 11 from each year

Track Carry Forwards

• Notice of Assessment shows balance
• Keep your own records too
• Schedule 11 tracks annually

Common Mistakes

Avoid These Errors

• Forgetting to claim tuition
• Not transferring when beneficial
• Transferring carried-forward amounts (not allowed)
• Claiming ineligible fees
• Missing student loan interest