Tuition Recovery and Education Credits

In an effort to retain graduates, provinces have recently begun to reimburse tuition paid to post-secondary graduates if they remain in the province. Saskatchewan will reimburse 100% of the tuition paid if the graduate remains in the province long enough, while Manitoba will reimburse up to 60%, and New Brunswick will reimburse 50%. This reimbursement is in addition to the credits allowed to students in the year that the tuition is paid (or in a later year if carried forward). For students who continue to live and work in the same province after graduation, the result is a reimbursement of more than the amount of tuition paid (in Manitoba and Saskatchewan).

Assuming a four-year program with $5,000 per year tuition ($20,000 total tuition), 8 months of full-time attendance, and a student paying taxes in the lowest bracket while in school, the following table shows the recovery of tuition fees each year over time in each province:

Many frenzied parents find the "back to school" rush a financial burden. Besides clothing, school supplies, transit passes and books, there is tuition for university students, a rising cost across the country. Now is the time to consider the monthly credits earned by post-secondary students, which will turn into cash at tax time for students or their supporting parents, grandparents or spouses. No receipts are necessary to benefit from this lucrative credit, but Form T2202A must be received from the university or designated educational institute.

Advisors and clients should check the points below for a better understanding of qualifying criteria.

Full Time Students. The credit for full-time students is $400 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.

Part Time Students. The credit is $120 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.