Who Is Qualified To Claim A Tuition Tax Credit In Canada?

A tuition tax credit in Canada helps many post-secondary students reduce their financial burdens. Tuition tax credits help students settle tax bills when filing tax returns. However, one has to meet all the requirements to qualify for the tax credit in Canada.

For example, you must be a student aged over 16 years, in a post-secondary school, and studying in a designated educational institute.

Before we get deeper into a tuition tax credit qualification, it’s essential to understand what a tuition tax credit is and how it works.

What Is A Tuition Tax Credit?

When a student pays tuition fees, they get a tax credit to use to pay taxes when filing returns.

However, the amount you get to clear the taxes depends on the tuition fees you pay for a year. Students outside of Canada also get a tuition tax credit as long as they are over 16 years of age, are undergoing post-secondary education, and have been studying for more than three weeks.

You are not eligible for the tax credit if you are employed and the employer pays all or part of your tuition.

Amount Of Money Given As Tax Credit

The Canada tuition tax credit is non-refundable. If unused, the institution carries it forward to the following tax year or transfers it to another person.

• Carried Forward

If you do not have to pay taxes that year, the tax credit at your institution is carried forward to the following tax year. Carrying forward of tax credits happens mostly to students who are unemployed while studying. 

• Credit Transfer

If you have unused tuition credits, you can transfer them to another person. However, there are laws governing transfers. For example, you can only move the credit to a qualifying relative or a common-law partner.

The student can transfer the tax credit to their spouse, parents, or grandparents. Also, the student’s in-laws and in-law-grandparents are eligible to receive the transferred money as per the law.

When transferring, the student must fill out a form with the receiver’s name, the credit amount, and the amount being used. They fill out the details in form T2202 or TL11A, depending on the institution.

However, if their common-law partner claims the amount of credit, the student’s parents and grandparents cannot be transfer recipients. The transfer is only possible on the current year’s tuition and not for the previous years. 

Tuition Credit Documents Required

All the accredited colleges, universities, and other institutions provide students with a T2202 (Education & Textbook Amounts Certificate) to prove that the student studied at the institution. The form shows the course and the duration of the study.

Certain schools have different rules. For instance, a student with a disability enrolled part-time can receive the same amount of credit a full-time student receives. 

How To Claim A Tuition Tax Credit

Although the tuition tax credit is given to students, not all qualify to claim the money. Here is more detailed information on who qualifies for the tax credit.

• Any student enrolled in a designated educational institution aged 16 and above can claim the tuition credit. Students in diaspora schools can claim the tuition tax credit only if they are doing programs longer than three weeks and are in the full-time mode of study. 
• If a student is employed and the employer reimburses tuition, they can only be eligible if the employer pays the student the tuition amount in their salaries. The same law applies when an employer pays tuition money to the parents on the student’s behalf.
• The student must be enrolled in post-secondary courses. Students in trades schools are also eligible.
• Students who are studying on scholarships and doing post-secondary courses can claim a scholarship exemption. 
• The fees you pay in an institution must be over $100 for you to qualify for the tax credit. 

As a student, you will not qualify for a tax credit if:

• A federal, territorial, or provincial job training program is sponsoring your program. If the firm does not include the fees in your income, you will be eligible to claim the tax credit. 
• You were an athlete, and the tuition was paid under a federal program to help the players. If the program did not include the payment in your income, you don’t qualify for a tax credit. 

Examination Fees For Licensing And Certification

Students who pay examination fees to institutions to get a certificate or license for a completed course can claim tax credit income. These institutions can be educational institutions, professional associations, and provincial ministries.

The course they are obtaining a license or certificate for must be recognized by the federal government. 

If you are paying a fee to be licensed as a tradesperson and practice your profession in Canada, you are eligible to claim the tax credit.

However, you cannot claim ancillary fees of more than $250 paid for occupational, trade, or professional examinations. You can only claim it if it is a requirement for all students.  

Forms For Claiming Tuition Tax Credit in Canada

Here’s how to claim a tuition tax credit in Canada. Your institution should provide one of these forms for you to claim the tax credit.

• Form T2201: Only the eligible students who paid tuition to the institution can fill out this form. With it, the students can calculate how much they can claim from the institution. It shows the amount of tuition money paid and all other expenses related to education tools. 
• Form TL11A: This form is for Canadian students studying in universities outside of Canada.
• Form TL11C: This is for commuters to the United States. 
• Form TL11D: This form is for Canadian students in education institutions outside Canada. 

You can contact the educational institution to issue you the form. Alternatively, you can get an official tax receipt that shows all the fees you have paid to the institution. 

International students studying in the country can also get tax credits because they file tax returns. 

As a student, the process for filing returns depends on your residency status. Some students are considered newcomers, non-residents of Canada, deemed residents, or deemed non-residents. 

Final Words

Being a student can be a burden finance-wise. Some students are unemployed and entirely rely on their parents for tuition fees but must pay taxes. However, this has been made easy with the provision of tuition tax credits in Canada.