How to Take Advantage of Student Tax Breaks

03 October 2013 by National Bank

Every dollar saved in income tax can help you stretch your budget to cover student expenses. Here are a few tax breaks to take full advantage of while studying.

There are three basic non-refundable tax credits that most post-secondary students should qualify for, which can be used to reduce any taxes payable on part-time or summer employment income.

The three credits, worth 15% at the federal level and which are also eligible for provincial credit, include:

1. Tuition credit

This applies to tuition fees paid to a university, college or other post-secondary institution in Canada, as well as tuition fees paid for courses certified by Employment and Social Development Canada to develop or improve skills.

2. Education credit

You can claim an education amount of $400 for each month in the year during which you were enrolled full-time in a qualifying educational program.

3. Textbook credit

While studying you can also claim a textbook amount of $65 for each month during which you qualified for the $400 full-time education amount above. Students who have no employment income to offset can transfer up to $5,000 in non-refundable education credits to a spouse, partner, parent or grandparent. They can also opt to carry the entire amount forward to be used in a future tax year.

Other potential tax credits of interest:

    • GST/HST credit: A tax-free quarterly payment available to low income Canadians who file a tax return.

    • Moving expenses: Students who move 40 kilometres or more from home to attend a post-secondary program on a full-time basis can deduct moving expenses against any income earned while at school.

    • Transportation: Students who take public transit can claim the federal public transit tax credit on their tax returns.

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