T2202A - Tuition Education and Textbooks Amounts

With the tax filing deadline arriving in less than 45 days (yikes!), we should give some thought to how to claim all those tuition fees that were paid out to various educational institutes. Advisors and clients should check the points below for a better understanding of qualifying criteria.

Here is a review of the basic definitions for non-refundable credits and what qualifies for the tuition credit and education amounts:

Full-Time Students. The education credit for full-time students is $400 per month, the textbook credit is $65 per month. A full-time education amount may be claimed for each whole or part month in the year that the student was enrolled in a qualifying educational program at a designated educational institution and the student:

• was enrolled full-time,
• was enrolled part-time and qualified for the disability amount, or
• was enrolled part-time because of a mental or physical impairment.

Qualifying educational programs (FULL-TIME): a program that lasts at least 3 consecutive weeks and requires a minimum of 10 hours of instruction or work in the program each week (not including study time). Instruction or work includes lectures, practical training, and laboratory work. It also includes research time spent on a post-graduate thesis.

After 2003, a program taken by the student in connection with the student's employment duties, even if that student receives income from that employment, will qualify provided only that the employer does not reimburse the tuition cost. Prior to 2004, the opposite was the case: such programs did not qualify, whether the employer reimbursed the student or not.

Non-qualifying educational programs: Students who receive, from a person with whom he or she deals at arm's length, a grant, reimbursement, benefit, or allowance for that program do not qualify.

However, receipt of a scholarship, fellowship, bursary, or prize received, or any benefit received under the Canada Student Loans Act, Canada Student Financial Assistance Act, or the Act respecting financial assistance for education expenses of the Province of Quebec does not disqualify the education program.

Scholarship Exemption: Beginning in 2010, where a scholarship, fellowship, or bursary is received in connection with a part-time program, the scholarship exemption will be limited to the amount of the tuition paid for the program plus the cost of program-related materials. This limitation does not apply to students who are entitled to the Disability Tax Credit.

Programs that are research-based and qualifying for the education amount, and leading to a degree or diploma will qualify for the exemption.

Post doctoral fellowships will however, be taxable.

Part-Time Students. The education credit is $120 per month, the textbook credit is $20 per month. These may be claimed for each whole or part month in the year that the student was enrolled in a specified educational program at a designated educational institution. A specified educational program is a program that lasts at least 3 consecutive weeks and requires at least 12 hours of instruction each month.

NOTE: KNOWLEDGE BUREAU SELF STUDY COURSES QUALIFY!  See our website at www.knowledgebureau.com for more information on our programs.

Only one education amount may be claimed for each month ó the full-time amount or the part-time amount.

Educational resources: For more information on tax planning provisions and compliance requirements, subscribe to The Knowledge Bureau's online tax reference for taxpayers, financial advisors and their clients: EverGreen Explanatory Notes.