Tax Tips For Students
| Sources: ICAO and CGA Canada |
Scholarships, Fellowships and Bursary Income
Scholarship, fellowship or bursary income received by a taxpayer in a taxation year with respect to elementary, secondary, post-secondary education or occupational training is not included in income and is, therefore, exempt from tax.
Textbook Credits
In 2006, the federal government introduced a non-refundable tax credit to assist with the cost of textbooks for post-secondary students. The textbook tax credit is calculated based on $65 for each month the student qualifies for the full-time education tax credit and $20 for each month the student qualifies for the part-time education tax credit
Unused Tuition and Education Credits
If students have any education, tuition fee or federal textbook credits that aren’t claimed or transferred, they can carry them forward to reduce their taxes in the future when their income is higher. They have five years to claim tax credits for student loan interest, but they can carry forward and claim education, federal textbook and tuition fee credits indefinitely.
GST Rebates
Many lower-income earners, including students, may be eligible for a GST credit. If so, don’t forget to apply for the GST rebate on the tax return.
Reduce a supporting person’s taxes
The education, tuition fee and federal textbook credits arising during the year can be transferred by a student to a supporting person such as a spouse, parent or grandparent (up to certain limits), which allows them to claim the credit and reduce their taxes.
Child Care Expenses
Parents who spend at least 12 hours per month studying in an educational program lasting at least three consecutive weeks at a secondary school, college, university or other designated educational institution, are eligible to claim expenses incurred for child care expenses while they or their spouse/common-law partner attends certain schools.
Moving Expenses
Students that were in full-time attendance at a post-secondary educational institution in Canada, and who moved at least 40 kilometres within Canada for employment purposes, may claim moving expenses against income earned from a full- or part-time job (including a summer job) the year the move took place or the following year. This also applies the year after graduation.
Eligible moving expenses include items such as:
- Travel costs (e.g., reasonable amounts for meals and accommodation) to move the individual and members of their household.
- Storage costs for household effects.
- Costs for up to 15 days of temporary board and lodging near either residence.
- The cost of cancelling a lease or selling the old residence as a result of the move.
- The cost of connecting or disconnecting utilities as a result of the move.
Property Tax Credit
Students who are 16 years of age or older and living on their own or with friends might be eligible to claim the Ontario property tax credit. Each student is eligible to claim their portion of the rent towards their Ontario property tax credit.
A student living in a residence affiliated with a university, college, or nursing school, might also be able to claim an occupancy cost of $25 on their tax returns for that portion of the year in which they lived in residence.
Credit For Public Transit Pass
The federal government has introduced a non-refundable tax credit for taxpayers who purchase transit passes generally totalling at least one month’s duration for various modes of transportation (e.g., a local bus, streetcar, subway or commuter train). Students should save their passes and obtain receipts in case they are requested by CRA.
