What are student tax credits in Canada?

21 February 2024 by National Bank
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If you’re a student, you know it can be challenging to balance work, school and paying the bills. Fortunately, there are several student tax credits and deductions to help you. 

Note: The tax credits detailed in this article are offered by the federal government. Contact your province or territory of residence for details on those offered in your region.

What is the tuition tax credit?

The tax credit for tuition fees applies to anyone studying at a Canadian or foreign post-secondary institution whose tax residence is in Canada. However, the institution must be approved by the Canada Revenue Agency (CRA).

To qualify, your tuition fees must be over $100. The good news is that professional admission and examination fees, even those paid to a professional association or government department, are also eligible for the tax credit.

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Good to know: Are you taking courses that are not at the post-secondary level? They may also be eligible for a tuition tax credit if you meet both of the following conditions:

  • You’ll be 16 years of age or older at the end of the tax year.
  • You’re taking these courses to obtain or improve job-related skills.

Studying in Canada but don’t know if you’re a Canadian tax resident?

→  Find the answer in our income tax article.

How is the tuition tax credit calculated?

This credit equals 15%* of the amount paid in tuition fees during one year. For example, a student who has paid $3,000 in tuition fees can receive a $450 credit.

*Calculated by multiplying the tuition by the rate of the lowest federal tax bracket for the current year. This has been 15% since 2006.

How do I claim the tax credit for tuition fees?

To claim this tax credit, you must have the form detailing your tuition fees (T2202, TL11A, TL11C or TL11D), issued by your educational institution. Then simply transfer this amount to line 32300 on your federal tax return.

This tax credit is non-refundable, which means that if you don’t have to pay income tax, you won’t receive a refund. However, you might be able to carry this credit forward to future years, when you’ll have to pay more income tax. You can also transfer it to your partner, a parent or a grandparent so they can reduce their tax bill. If you transfer an amount to a designated person, transfer only the amount they can use. This will maximize the amount you can carry forward to a future year.

→ Want to learn more? You’ll find all the details about this tax credit by visiting this Government of Canada page.

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What is the Canada training credit (CTC)?

Are you between 26 and 66 years of age this year and continuing your training? You could be eligible for a tax credit to train in Canada. Here’s how it works.

How is the amount of the Canada training credit (CTC) calculated?

You’re entitled to the minimum of your training credit limit for the year or 50% of your education costs.

The maximum annual amount that can be claimed for this credit is $250. It increases by $250 each year you qualify for this credit to a maximum of $5,000.

For example, if you qualify for this credit for a second year, your maximum amount will be $500 ($250 + $250). This amount will be indicated on your notice of assessment.

How do I claim the Canada training credit (CTC)?

To apply for this credit, enter the amount claimed on line 45350 of your federal tax return.

Did you know that the tax credit is refundable? In other words, even if you don’t pay income tax, you’re entitled to a refund.

→ Want to learn more? Visit the federal government site to learn more about the Canada training credit.

What is the tax credit for interest paid on student loans?

If you use loans to pay for your education, you could be eligible for a student loan tax credit. This credit applies to interest paid on student loans obtained through the following programs:

  • Canada Student Loans Act
  • Canada Student Financial Assistance Act
  • Apprenticeship Loans Act
  • or similar provincial or territorial legislation

How is the tax credit for interest  paid on a student loan calculated?

You can receive a non-refundable tax credit equal to 15% of the amount of interest paid on your student loans.

How do I claim the tax credit for the interest paid on a student loan?

You can claim this credit by entering the amount on line 31900 of your federal income tax return.

Note that this credit is non-refundable. As a result, if you have no income tax to pay for the current year, you won’t receive a refund. That’s why, in this situation, it’s a good idea to defer the credit until you can use it to help reduce your tax bill.

In fact, you can use it up to five years after paying interest on your student loans. Only the interest that you have not already claimed qualifies for a deduction.

→ Want to learn more? Visit the federal government site to learn more about the interest paid on student loans.

What is the deduction for moving expenses?

This tax incentive isn’t just for students. You can benefit if you need to move for your studies. You can deduct your moving expenses from your taxable income in the following cases:

  • You’re moving to study full time in a post-secondary program at a university, college or other educational institution.
  • You’re moving to a location at least 40 kilometres from your new place of study or work via the shortest route on public roads.
  • You’re moving to take a job or operate a business in a new location.

→ Want to learn more? Visit the federal government website to learn more about the tax deduction for moving expenses.

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Good to know: Some provinces and territories also offer a tax credit for interest paid on student loans. Check with the revenue agency in the province where you reside.

What is the GST/HST credit?

This credit isn’t just for students. You benefit if your income is relatively low during your studies. The GST/HST credit is a tax-free amount paid four times a year to low- and modest-income earners to offset the goods and services tax/harmonized sales tax (GST/HST) they pay.

To qualify, your tax residence must be in Canada, you must be 19 years of age or older, or:

  • Have (or have had) a spouse
  • Be (or have been) the parent of a child with whom you live (or have lived)

How is the GST/HST credit calculated?

To find out how much you could receive, visit this section of the Government of Canada website.

If you’re a student, don’t forget to claim the credits and deductions to which you’re entitled.

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