Being a student can be fun, but it’s also very expensive. Luckily, there may be some ways to keep a little more cash in your pocket.
Textbooks, tuition, relocation costs, accommodation, and school supplies can be a huge financial burden, especially for older students with children. The good news is that with careful planning and research, you can make the most out of student tax credits and deductions in Canada, and in turn help you save money in the long run.
Key Points You Should Know About Student Tax Credits In Canada
- Students are eligible to claim several tax credits and deductions for things like tuition fees, moving expenses, and student loan interest.
- Part-time students can also claim tax credits and deductions, though claim amounts aren’t as high as full-time students.
Types Of Tax Credits And Deductions For Students
Similar to how there are specific tax credits and deductions for business owners, seniors, parents, and immigrants, there are tax credits and deductions specific to students.
As a student, you can apply for the following tax credits and deductions:
Moving Expenses And Transportation
Moving from one home to another is stressful enough as it is. The costs associated are another burden to add to the pile. However, if you are moving to go to school, you can claim moving expenses on your taxes with line 21900 of your tax return.
Keep in mind that you can only claim moving expenses for school if:
- You moved 40 km closer to your educational institution, and
- You moved to study full-time.
Types Of Moving Costs You Can Claim
There are a few different kinds of moving costs that students can claim, including:
- Travel costs (renting a U-Haul or taking a train, for example)
- Costs of boxes and packaging materials
- Services of a moving company, or gas for a moving vehicle that you drive
- Costs of meals and accommodation during the move, provided the period of time does not exceed 15 days
- Utility and reconnection charges
Transportation costs incurred to go to school, including a public transportation metro card or gas for your vehicle, can also be deducted from your income when you file your taxes.
Canada Training Credit
You may be eligible to claim the Canada Training Credit for eligible tuition fees paid to a qualifying educational institution in Canada, or for fees related to examinations. You can claim the lesser of:
- Half of these fees can be claimed on line 32000 of Schedule 11, or
- Your CTCL for the taxation year
Child Care Expenses
You can claim child care expenses on line 21400 of your tax return for when you are studying or in class. Some examples of eligible expenses include fees incurred from a nanny or babysitter, day camp, overnight camp, nursery school, and more.
Non-Student Beneficial Tax Credit
While this credit is not specific to students, the GST/HST tax credit can still benefit students. The GST/HST tax credit is a quarterly payment given to Canadians with low or modest incomes to help them pay for GST and HST.
This credit is non-taxable, and you are automatically registered for the student tax credit in Canada every time you file your taxes.
Can You Claim The Interest Paid On Your Student Loans?
Student loans collect interest over time, which can add yet another expense to your finances. However, that interest is eligible for deduction on your taxes, as long as the student loan meets the following requirements:
- The student loan is not a personal loan or line of credit
- The student loan was not borrowed from a foreign bank
- The loan was received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act, or other similar provincial programs
How To Claim The Interest Paid On Your Student Loans
You can claim your student loan interest on line 31900 of your tax return.
When completing your taxes, it’s important to remember that you don’t actually have to claim the loan interest for student loans every year. The Canadian Revenue Agency (CRA) allows you to claim the interest every five years.
This means that waiting a few years before claiming the interest can actually result in a bigger deduction on your income than if you were to claim it every year. So, it’s a good idea to only claim the interest after at least two years to maximize the student tax deduction in Canada.
Gig jobs are popular among students. Check out these tax tips for gig workers.
Are Scholarships, Bursaries, And Grants Considered Taxable Income?
If you succeeded in obtaining a scholarship or bursary for your studies, the good news is that the income is not taxable. That means you don’t have to declare it as income on your taxes. Income received from a student loan is also non-taxable.
If you obtained a research grant for your studies, you will have to declare it as income on your taxes. However, you can deduct the related expenses on line 10400 of your tax return, which can include the following:
- Costs of hiring an assistant
- Costs of equipment and supplies
- Costs incurred by renting out a laboratory space
- Travel costs, meals, accommodation
Can You Claim Your Tuition, Education, And Textbook Costs?
The tuition, education, and textbook tax credit was repealed in 2017, meaning that education and textbook credits are no longer valid for students to claim.
However, unused tax credits for the year, including the education and tax credits, may be carried forward on future tax claims.
Tuition tax credits are still valid, however, and can be claimed by filling out line 32300 of your tax return if the courses in question were:
- Taken at a post-secondary education institution
- For individuals 16 years of age or older at the end of the year
What Kind Of Tuition Fees Qualify For Student Tax Credits In Canada?
The tuition tax credit is available to post-secondary students. If you pay for tuition, you can inform the CRA when you’re filing your income taxes, and they’ll reduce your tax bill.
Generally speaking, courses taken in 2023 at an educational facility in Canada are eligible for a tuition tax credit if they were either:
- Taken at a post-secondary institution
- For students at least 16 years old at the end of the year, who are learning or improving skills in a job, and the educational facility is certified by the Minister of Employment and Social Development Canada
How To Calculate Your Tuition Tax Credit?
The tuition tax credit is based on a percentage of your total tuition costs. That percentage is equivalent to the lowest tax bracket rate, which is currently 15%.
To calculate your tuition tax credit, multiply your total eligible tuition amount by 15%. For instance, total eligible costs were $5,000, the calculations would be as follows:
$5,000 x 15% = $750
You can then claim the $750 when you file your income taxes.
Final Thoughts
You’re spending thousands of dollars on post-secondary education, which may cost you more than what your current finances can handle. But with all the student tax credits in Canada, you can ease the financial burden.
