It’s Back to School Time - Save Money with Tax Tips Series!

PART 1: TUITION EDUCATION AND TEXT BOOK CREDITS

In the next week or so, as the children head back to school, we should give some thought to how to claim all those tuition fees that are being paid out to various educational institutes. A review of the basic definitions for non-refundable credits and what qualifies for the tuition credit and education amounts is discussed below:

DEFINITIONS IN BRIEF: Non-refundable tax credits available to post-secondary students and their supporting individuals include the following:

  • Amounts for Tuition: Post-secondary students may claim the tuition amount under S.118.5 of the Income Tax Act.
  • Amounts for Education Costs: A monthly education amount available under S.118.6
  • Amounts for Textbooks: A monthly credit for such costs is specified under S. 118.6(2.1).
  • Transfers to Supporting Individuals: Students must claim the above amounts first on their return. If the student is not taxable, the claim for the tuition, textbook and education amounts may be transferred from a student to the supporting individual under S.118.81 or may be carried forward to future years for use by the student.

TUITION FEES

Students may claim the fees paid for courses taken in the tax year. To qualify, each tuition fee must be more than $100. Eligible fees include tuition fees:

  • Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in Canada,
  • Fees paid to an educational institution in Canada certified by the Minister of Human Resources Development for courses (if the student was 16 or older in the year) to develop or improve skills in an occupation,
  • Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in the United States if the student lived in Canada near the border throughout the year and commuted to the school, and
  • Fees paid if the student was in full-time attendance at a university outside Canada, for courses that were at least 13 consecutive weeks long, and that will lead to a degree.

Eligible tuition fees include:

  • admission fees,
  • charges for the use of library or laboratory facilities,
  • examination fees,
  • application fees (but only if the student later enrolls in the institution),
  • charges for a certificate, diploma, or degree,
  • mandatory computer service fees,
  • academic fees,
  • the cost of any books that are included in the total fees for a correspondence course, and
  • fees, such as athletic and health services fees, paid to a university, college, or other educational institution in addition to tuition for post-secondary courses, when such fees are required to be paid by all students. If not all students are required to pay them, then amounts eligible are limited to $250.

Non-qualifying tuition fees include:

  • Costs for secondary education at a private school or for private music, dance or other such lessons, do not qualify.
  • students' association fees,
  • medical care,
  • transportation and parking,
  • meals and lodging,
  • goods of lasting value that you will keep, such as a computer, microscope, uniform, or an academic gown, and
  • initiation or entrance fees to a professional organization
  • Also, fees cannot be claimed if:
    • they are paid or reimbursed by an employer, where the amount is not included in the employee's income,
    • paid by a federal, provincial, or territorial job training program where the amount is not included in income, or
    • the fees were paid (or are eligible to be paid) under a federal program to help athletes, where the payment or reimbursement has not been included in income.

NOTE: KNOWLEDGE BUREAU SELF STUDY COURSES QUALIFY!

Next time: Education Amounts

COMING IN SEPTEMBER: OTHER FAMILY TAX PROVISIONS

  • Public Transit Passes
  • Children's Fitness Credit
  • Medical Expenses