Personal
Home Bank accounts
Credit cards
Borrowing
Mortgages
Savings and investments
Insurance
Advice
Business
Home Banking Solutions
International
Financing
Investing
Going Further
Tips and Tools
Wealth Management
Home
CLOSE

The Ins and Outs of Student Income Tax Returns

13 June 2019 by National Bank of Canada
Taxes as a student

Are you a student and not earning any income? It’s still a good idea to file your tax returns. No matter your income, here are three ways to take advantage of your tax return.

First things first: Filing your tax return is the only way to receive a GST credit from the Government of Canada and a solidarity tax credit from the Government of Quebec.

Are you working while you’re in school? Your employer may be taking taxes out of your pay. Yet students often make an income that’s below the limit of what is considered a taxable amount. Filing your income tax return allows you to be reimbursed for the amount you overpaid. What better way to help you breathe easier when you’re on a tight budget?

Tax credits to watch out for

When filing your taxes, you may be able to benefit from various tax credits.

A tax credit is a fiscal advantage in an amount that is either refundable or non-refundable. If it is non-refundable, you can use it to reduce the taxes you owe. If it is refundable, you will receive this amount whether or not you have taxes to pay. 

1. Solidarity tax credit

If you are 18 years of age or older and you live with your parents, the solidarity tax credit is $287 per year. If you live alone, the amount is $981.

Starting at age 19, the GST credit is now $284 in 2019.

2. Canada employment amount

This tax credit is non-refundable. You can request it if you have a job while you’re in school. It could save you up to $150 in taxes.

Don't look any further

Find the bank account right for you

3. Credit for school tuition

Quebec and Ottawa grant 8% and 12.5%, respectively. If you pay $3,000 in university tuition, your total savings would be $615.

Interesting. And if you do not owe anything in taxes, you have two options: carry the credit over to another year or transfer it to a loved one.

However, in 2017, the federal government eliminated the federal education amount as well as the amount granted for textbooks. Do you have unused amounts from previous years? You are allowed to request them when you need them.

4. Credit for interest paid on student loans

At the federal level, you have five years to request this credit. There is no time limit to benefit from the credit in Quebec.

This credit applies only to government student loans, such as those granted by Quebec financial assistance.

Deduct your moving expenses

Another way to pay less taxes is to deduct certain expenses. While a credit lowers the amount of taxes you have to pay, a deduction lowers your taxable income. There are several available, but the deduction for moving expenses is one of the deductions most used by students.

Are you moving for a job or an internship? If you are within at least 40 km of your workplace, you can deduct certain expenses from the income you earn there, such as gas and meals during travel, movers’ fees, etc.

And if you’re moving to be closer to your CEGEP or university, you can also deduct the cost of your relocation. To do so, you must be a full-time student and have received a research grant.

Don’t be shy—ask for help!

In March and April, a large number of teaching establishments and community organizations hold workshops about taxes, which is an ideal option for low-income earners. Volunteers can help you file your tax returns. Educate yourself!

Of course, you can also file your taxes with the help of a web application or software to make things easier. However, take the time to properly answer the questionnaire. The application will determine which credits and/or deductions you are eligible for, then automatically make the calculations.

If you have a child, you may also be entitled to a deduction for childcare and other family support measures. Other tax measures may be available to you. Get informed!

To ease your tax burden, we suggest you “do your homework” to help finance your studies.

Legal disclaimer

Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.

The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.

The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.

This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.

The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.

Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).

Categories

Categories