Claiming Tuition Tax Benefits: What Are Your Net Tuition Fees?

Evelyn Jacks

Saving up to make tuition fee payments is always an obsession for post-secondary students and their supporting individuals, but tuition fee tax credits, together with the Canada Training Credit, available to those aged 26 to 65 as at the end of December this year, can bring significant tax savings to help make it all more affordable.  Here are some tax tips and true-to-life examples for minimizing your back-to-school spend:

First know the tax  rules.  The tuition fee credit is a non-refundable tax credit.  That means that you have to have taxable income over $15,000 to use it.  However, the Canada Training Credit is fully refundable.  To get it you must file a tax return, even if you have no taxable income.  If you haven’t filed for these reasons since 2019 and you were over age 21, file those returns now. 

If you were 18 or older in those  years you will also qualify for the refundable GST/HST credit, or if there was some part-time income (and you were not a full time student), a refundable Canada Worker’s Benefit may be possible too, aside from available provincial tax credits, depending on where  you live.  

Some examples.  Assume Sangeet is a potential student for the programs available from post-secondary institute, Knowledge Bureau.  Her net tuition fees payable under her various course options are as follows:

DMA™ Designation Programs.

• Tuition Fees            $3990 plus GST (5%)      = $4189.50 (note HST in some provinces)
• CTC Calculation       Lesser of 50% of Tuition = $2094.75 or $1000 (eligible per tax filings)
• CTC Claim $1000 (Note - if no taxes payable, this $1000 CTC is fully refundable when you file your tax return)
• Plus Claim a Tuition Amount for the Remaining Fees:
• Tuition Credit*       $3189.50  ($4189.50 less CTC claimed $1000 -T2202 required)
• Tax benefit             $765.50 ($3189.50 x 24% - varies with province of residence)    
• Total Tax benefit (Tuition amount + CTC)= $1765.50 (42% of tuition fees payable)
• Net cost of tuition $4189.50 - $1765.50 = $2424.00

RWM™ or MFA-P™ Designation Programs.  

• Tuition Fees            $1795 plus GST (5%)      = $1884.75 (note HST in some provinces)
• CTC Calculation       Lesser of 50% of Tuition = $942.38 or $1000 (eligible per tax filings)
• CTC Claim $942.38 (Note – depending on taxes payable, this CTC may be fully refundable when you file your tax return)
• Plus Claim a Tuition Amount for the Remaining Fees:
• Tuition Credit*       $942.37  ($1884.75 less CTC claimed $942.38 -T2202 required)
• Tax benefit             $226.17  ($942.37 x 24% - varies with province of residence)     
• Total Tax benefit (Tuition amount + CTC)= $1168.54 (62% of tuition fees payable)
• Net cost of tuition $1884.75 – 1168.54 = $716.21

Practice Management Programs – Certificate Digital Practitioner or Privacy Courses or CE Savvy Micro Course Collections – 30 CE Credits each

• Tuition Fees            $995 plus GST (5%)        = $1044.75 (note HST in some provinces)
• CTC Calculation       Lesser of 50% of Tuition = $522.38 or $1000 (eligible per tax filings)
• CTC Claim $522.38 (Note – depending on taxes payable, this CTC may be fully refundable when you file your tax return)
• Plus Claim a Tuition Amount for the Remaining Fees:
• Tuition Credit*       $522.37  ($1884.75 less CTC claimed $522.38 -T2202 required)
• Tax benefit             $125.38  ($522.38 x 24% - varies with province of residence)     
• Total Tax benefit (Tuition amount + CTC)= $647.75 (62% of tuition fees payable)
• Net cost of tuition $1044.75 – 647.75= $397.00 per course

CE Summits – 4 Event Package ($390 per event)

• Tuition Fees            $1560 plus GST (5%)      = $1638.00 (note HST in some provinces)
• CTC Calculation       Lesser of 50% of Tuition = $819.00 or $1000 (eligible per tax filings)
• CTC Claim $819.00 (Note – depending on taxes payable, this CTC may be fully refundable when you file your tax return)
• Plus Claim a Tuition Amount for the Remaining Fees:
• Tuition Credit*       $819.00 ($1638.00 less CTC claimed $819.00 -T2202 required)
• Tax benefit             $196.55  ($819.00 x 24% - varies with province of residence)     
• Total Tax benefit (Tuition amount + CTC)= $1015.56 (62% of tuition fees payable)
• Net cost of tuition $1638.00 – 1015.56 = $622.44 (or $155.61 per event)

CE Summit – Single event Package ($690 per event)

• Tuition Fees            $690 plus GST (5%)        = $724.50 (note HST in some provinces)
• CTC Calculation       Lesser of 50% of Tuition = $362.25 or $1000 (eligible per tax filings)
• CTC Claim $362.25 (Note – depending on taxes payable, this CTC may be fully refundable when you file your tax return)
• Plus Claim a Tuition Amount for the Remaining Fees:
• Tuition Credit*       $362.25  ($724.50 less CTC claimed $362.25 -T2202 required)
• Tax benefit             $  86.94  ($362.25 x 24% - varies with province of residence)     
• Total Tax benefit (Tuition amount + CTC)= $449.20 (61% of tuition fees payable)
• Net cost of tuition $724.50 – $449.20 = $275.30 (cost per event)

Bottom Line:  Paying attention to the tax benefits available through the federal and provincial governments can make going back to school much more affordable.  Remember, you may be able to benefit from:

• The refundable Canada Training Credit, as discussed above
• The non-refundable tuition fee amount, as discussed above
• Transfer of tuition fee credits to a supporting individual (parent, grandparent, spouse) if your net income exceeds $15,000 in 2023.
• The RRSP Lifelong Learning Plan – however, you must be considered to be in full time attendance in this case. According to CRA, this is determined as follows:

“The educational institution determines who is a full-time or part-time student. . .  The qualifying educational program requirement can be met by a person taking courses by correspondence or by a person enrolled in a distance education program. Even if the student is enrolled in a program that requires spending 10 hours or more per week on courses or work in the program, the institution may consider the student to be enrolled on a part-time basis. In this case, you will not be considered a full-time student for LLP purposes. . . the only exception to this rule (is a)student who meets one of two disability conditions . . . The program in which the student is enrolled must still be a qualifying educational program that usually requires a student to spend 10 hours or more per week on courses or work in the program. However, a student who meets the disability conditions can spend less than 10 hours per week on courses or work in the program.”

Evelyn Jacks is Founder and President of Knowledge Bureau and the best-selling author of 55 personal tax and finance books.  Follow her on twitter @evelynjacks.