Student Tax Credits and Deductions
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Becoming a student at any point in your life can be a fun and rewarding experience. However, there are often many financial challenges associated with enrolling in a university or college program. 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 tax credits and deductions that are specifically meant for students, and in turn help you save money in the long run.
Check out the student loan programs available for Canadian 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. Here are all the credits and deductions you can apply for if you are a student:
Tuition, Education, and Textbook Tax Credit
The tuition, education, and textbook tax credit was actually repealed in 2017, meaning that education and textbook credits are no longer valid for students to claim.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
Check out these tax tips for low income earners.
Interest Paid on Your Student Loans
Student loans collect interest over time, which can add yet another expense to a student’s 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
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 allows you to claim the interest every 5 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 2 years to maximize the deduction.
Gig jobs are popular among students. Check out these tax tips for gig workers.
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.
There are a few different kinds of moving costs that students can claim, including:
- Travel costs (renting a uHaul 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.
Check out what receipts you should save for your taxes.
Scholarships, Bursaries, and Grants
If you succeeded in obtaining a scholarship or bursary for your studies, the good news is that the income is not taxable, and 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
Check out these student loan programs.
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. For more information regarding eligible child care expenses, visit the Canada Revenue Agency’s website.
A 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 credit every time you file your taxes. If you are eligible for this credit, you can expect to receive the following annual amounts:
- $451 for single persons
- $592 for married or common-law living persons
- $155 for each child you have below the age of 19
For more information about the GST/HST credit, visit the Canada Revenue Agency’s website.
If you’ve recently decided to pursue post-secondary education, congratulations! Despite the burden of tuition costs, rent, and other related expenses, having a good handle on what you’re entitled to in your taxes can help you offset those costs, and allow you a bit of ease as you study.
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