This document has been updated on October 24th, 2017 and reflects the state of the Law, including draft amendments, at that date.


Deductions and Credits

Tuition Tax Credit

Tuition fees for students enrolled on a full- or part-time post-secondary1 basis in Canada and, in certain instances, outside Canada2, and, since 2017, occupational skills courses that are not at a post-secondary school level are eligible for a non-refundable tax credit, provided they total more than $100 per establishment. In Quebec, the $100 threshold applies to total expenses and the credit rate amounts to 8%.3 In New Brunswick, the tuition and education tax credit is eliminated since 2017.  In Ontario, the tuition tax credit is eliminated and may no longer be claimed for courses starting after September 4, 2017.

Tuition fees include entrance fees, use of library or laboratory facilities, issuance of a certificate or diploma and related expenses charged to all students, other than payments to a student association.

Examination fees required to obtain a professional status, certification or licence allowing the individual to practice a profession or trade within Canada are eligible for the credit.

 


1 Or in a professional school if the student is at least 16 years of age.
2 A student must be enrolled in a post-secondary program of study outside of Canada for a minimum of three consecutive weeks. No minimum duration is provided for a program of study being followed in an establishment in Canada.
3 A transitional rule applies for certain tuition fees incurred before March 28, 2013 that are carried forward to a subsequent year.

Education Tax Credit

In Ontario4, students may claim a non-refundable credit for each month (or part of month) of study inside or outside Canada at an accredited teaching establishment or during which they are registered full-time or part-time in a cooperative program or an eligible training program. To be eligible for the credit, the study program must normally be at the post-secondary level and lead to the receipt of a college diploma, a bachelor’s degree, a master’s degree, a doctoral degree or any equivalent level.

The credit applies on $547 per month for full-time students5 and on $164 per month for part-time students.6 This credit is eliminated for courses starting after September 4, 2017.

A student who is registered in an eligible training program on a part-time basis because of a mental or physical disability is entitled to a credit as though he/she were a full-time student provided he/she is entitled to the disability credit. A student who takes post-secondary courses related to his/her job can claim the education credit provided the costs are not reimbursed by his/her employer.


4 For federal and New Brunswick purposes this credit is eliminated since 2017.
5 Minimum of three consecutive weeks and 10 hours of courses per week.
6 In Minimum of three consecutive weeks and 12 hours of courses per month.

Credit for Interest Paid on Student Loans

A taxpayer may claim a non-refundable tax credit on interest paid in the year on a student loan granted under a federal or provincial program. In Ontario and New Brunswick, this credit also applies to interest paid on Canadian loans to apprentices.

Before renegotiating a student loan, remember that you cannot claim a credit for interest paid on any loan other than a loan granted under a federal or provincial program nor on a student loan merged with another type of loan.

Transfer and Carryover of Student Credits

Students must first claim the education tax credit, the tuition tax credit, the textbook credit and the interest tax credit on any student loans in their own tax returns. They can then carry over the unused portion of those credits or transfer them as follows:

Carryover period Transfer to parent or grandparent of the student and his/her spouse Transfer to spouse
Federal7 Quebec Federal8 Quebec Federal8 Quebec
Tuition fees Indefinitely Yes

Maximum of $5,000 in total9

Yes Yes

Maximum of $5,000 in total

Yes10
Education Indefinitely n/a

n/a

 

Textbooks
Interest on student loan 5 years Indefinitely No

 

To maximize the transfer of tax credits, reduce your net income as a student by maximizing the permitted deductions, such as the moving expense deductions and transfer only the amount that will be deducted by your parent.


7 Includes Ontario and New-Brunswick, except for the textbook credit that is not available in those provinces. It is still possible to carry forward the balances for unused education and textbook tax credits following the elimination of these credits in 2017.
8 Includes Ontario.
9 $7,033 in Ontario in 2017.
10 Possible under spouse transfer mechanism for non-refundable tax credits (see Section II).

Tax Credits for Children in Post-Secondary Studies – Quebec

Minor Child

A person supporting a student under 18 years old can claim a non-refundable tax credit in respect of the student if the student is enrolled in vocational training or post-secondary studies. The 2017 credit equals 16% of $2,682 per semester up to a maximum of two semesters per year and is reduced by the income earned by the student, excluding scholarships. To be entitled to it, the taxpayer must support the student who must also ordinarily live with him/her during the year. The dependent student can be the child, grandchild, brother, sister, nephew or niece of the supporting person or of his/her spouse.

Adult Child – Transfer Mechanism for the Recognized Parental Contribution

A full-time adult student in a recognized establishment can transfer the unused portion of his/her basic tax credit for 2017 up to $9,582 ($6,900 if only one semester is completed in the year) to his/her father or mother, or allocate it between the two. There is a $2,107 supplement for single-parent families who have no minor children. The transferable amount is reduced by the child’s income, excluding scholarships.

Moving Expenses

Expenses incurred for moving from one place to another in Canada or elsewhere to be at least 40 kilometres closer to an educational institution where the student will attend full-time post-secondary courses are deductible. These expenses are only deductible from amounts included in income from taxable scholarships, fellowships, bursaries and research grants. For Quebec purposes, they can only be deducted from research grants. Undeducted moving expenses can be carried forward to the following year.

Moving expenses incurred to change residence in connection with a job, including a summer job, are deductible if the conditions described in Section V are satisfied. However, the deduction may not exceed net employment income.

Keep your receipts for moving expenses (travel by plane or otherwise, meals, temporary lodging) to claim a deduction for such expenses or use the simplified method.

Child Care Expenses

See Section II.