Claiming Tuition for Post-Secondary Education

If you have a university bound student in your home this year, there is plenty of good tax news to help with the financial burden. Once again, it’s important to be aware of opportunities to save or recoup some money, and remember to keep all receipts!

Post-secondary students may claim a non-refundable tax credit on their tax return, featuring three parts:  the tuition amount, the education amount and the relatively new amount for textbooks. Better yet, if the student is not taxable, the claim for the tuition, textbook and education amounts may be transferred from the student to the supporting individual. Under-used or unused amounts may be carried forward to future years when the student has more income and would, therefore, be subject to more tax (which could then be reduced by claiming the tax credit).

Tuition Fees Claimable. Students may claim the fees paid for courses taken in the tax year, which is the calendar year. To qualify, each tuition fee must be more than $100 and must be paid as follows:

• for courses at a post-secondary school level, paid to a university, college, or other educational institution in Canada

• paid to an educational institution in Canada certified by the Minister of Human Resources Development for courses to develop or improve skills in an occupation, if the student was 16 or older in that year
• 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
• or 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 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. You should also be aware that certain costs cannot be claimed, specifically if:

• they are paid or reimbursed by an employer, where the amount is not included in the employee’s income
• they are paid by a federal, provincial, or territorial job training program where the amount is not included in income
• 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.

In addition, the following are not deductible as tuition fees: students’ association fees, medical care, transportation and parking, meals and lodging, goods of lasting value that the student will keep (such as a computer, microscope, uniform, or an academic gown), and initiation or entrance fees to a professional organization.

Filing Requirements. The claim for these credits originates on the student’s Schedule 11 Federal Tuition, Education, and Textbook Amounts. Claim the amounts transferred from a child to a supporting parent or grandparent on line 324 . If the transfer is to the student’s spouse, complete Schedule 2 Federal Amounts Transferred From Your Spouse or Common-law Partner.

Tax Receipts. The educational institution will issue an official receipt or Form T2202 Education and Textbook Amounts Certificate or Form T2202A Tuition, Education, and Textbook Amounts Certificate showing the amount of tuition paid.

Evelyn Jacks is President of The Knowledge Bureau, a national designated educational institute focused on excellence in financial education for financial advisors and their clients. For information about certificate tax, retirement and investment courses see www. knowledgebureau.com or call 1-866-953-4769.