Prior to 2011, Canadian students in full-time attendance at a university
outside of Canada were eligible for the Tuition Tax Credit, the Education
Tax Credit, and the Textbook Tax Credit, as long as they were enrolled in a
course lasting at least 13 consecutive weeks and leading to a degree.
Similarly, a Canadian student can currently receive Educational Assistance
Payments (EAPs) from a Registered Education Savings Plan for enrolment at
an educational institution outside Canada that provides courses at a
post-secondary school level, provided the student is enrolled in a
course of not less than 13 consecutive weeks.
However, in light of the fact that many programs at foreign universities
are based on semesters shorter than 13 weeks, changes to the Tax Act
reduced the minimum course-duration requirement from 13. The
13-consecutive-week requirement for EAP purposes was also reduced to three
consecutive weeks when the student is enrolled at a university in a
full-time course. However, from 2017 on, this is only relevant for the
tuition tax credit.
Credit for interest on student loans
A student may also claim a personal tax credit equal to the lowest tax rate (15% for 2017) multiplied by the amount of
interest paid in a year, or any of the previous five years, on a loan made
under the Canada Student Loans Act,Canada Student Financial Assistance Act, Apprentice Loans Act or a similar provincial or territorial
program to students at the post-secondary school level. Unlike the tuition
credit, this credit is not transferable; the claim is available only to the
person who received the loan or who legally owes interest on the loan.
However, the interest may be paid by the student or a person related to the
Note that the credit applies to interest only and not repayment of the
principal. Moreover, it does not apply to interest accrued but not paid or
to any forgiven interest. Institutions administrating the student loans
will usually provide students with statements indicating the eligible
The receipt of the student loans itself is not taxable, i.e., because it is
a loan rather than an income item.
Prior to July 1, 2017, students were able to claim a tax credit for the
cost of monthly or annual public transit passes. However, this credit was
eliminated for transportation that occurs after July 1, 2017 (per the 2017
federal budget). So for 2017, students can at least claim a credit for the
first part of the year for his or her eligible transit costs (and can also
be claimed by a spouse or common-law partner and dependent children under
the age of 19 years).
Tips for filing a student tax return
In order to claim the various credits, the student will need to file a tax
return. Although this may seem like more homework for your child (or, more
likely, you) there are several other advantages that may be available by
filing a tax return, including the following:
* Tax refund.
A student can be entitled to a refund of tax that was withheld by an
employer on a summer job. However, this money is not available unless a
return is filed.
Older students may be entitled to receive cash from the government.
Although students will usually not actually owe any tax because of the tax
credits and deductions available, a number of credits are linked to income,
such as GST and provincial tax credits. For example, if you are 19 or over,
you may be eligible for the annual GST/HST Credit, which is paid in
quarterly installments. You apply for it by filing a tax return and
completing the GST/HST application section of the return.
Also, some provinces provide tax credits for low-income taxpayers, which
are paid in the form of a tax refund. Check out what is offered in your
Filing a tax return can establish RRSP “contribution room” – i.e, the
ability to make future contributions to an RRSP. The student does not have
to contribute now, since any unused contribution room can be carried
If students leave home to attend university, they can deduct expenses to
move to the school if they have income from scholarships or a part-time job
at that location. Students can also deduct moving expenses to return home
against income from summer employment. (Note that other deductions, such as
childcare expenses, are available to parents who go back to school).
Expenses may include temporary accommodation near the old or new residence
(up to 15 days), gas, meals and lodging en route. If the move is
farther afield, don’t forget plane fare.
Samantha Prasad, LL.B., is a Partner with Toronto law firm
Minden Gross LLP, a Meritas Law Firm Worldwide affiliate, and specializes in corporate,
estate, and international tax planning. She writes frequently on tax
issues, and is the co-editor of various
Wolters Kluwer Ltd. tax publications. Portions of this article first appeared in The TaxLetter, © 2017 by
MPL Communications Ltd. Us
ed with permission.
© 2017 by Fund Library. All rights reserved. Reproduction in whole or in
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The foregoing is for general information purposes only and is the opinion
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