As tax season approaches, post-secondary students across Canada should be taking stock of the various education-related tax credits available to them. While the federal education and textbook credits were eliminated in 2017, several valuable options remain that can significantly reduce tax bills for students and their supporting family members.
The tuition tax credit remains the cornerstone of education-related tax benefits in Canada. For 2024, eligible students can claim a non-refundable federal tax credit of 15% on qualifying tuition fees paid to Canadian universities, colleges, and other certified institutions. This credit applies to tuition fees exceeding $100 per institution, and there’s no upper limit on the amount that can be claimed.
“The tuition tax credit is often overlooked or underutilized,” says Maryanne Wilson, a Toronto-based tax specialist. “Students should be keeping all receipts and tax forms, even if they don’t have taxable income in the current year, because these credits can be carried forward indefinitely or transferred to a supporting family member.”
Indeed, one of the most valuable features of the tuition credit is its flexibility. Students with little or no income can carry forward unused amounts to future tax years when they enter the workforce, or they can transfer up to $5,000 of current-year amounts to a supporting parent, grandparent, or spouse.
Provincial variations add another layer to consider. While most provinces and territories offer their own tuition credits that mirror the federal program, rates and eligible amounts differ. Quebec, for instance, calculates its credit differently, while Alberta eliminated its education and tuition tax credits altogether in 2019, only to reinstate them in 2020 following public pressure.
Ontario made headlines in 2017 when it introduced the Ontario Student Assistance Program (OSAP) overhaul that initially eliminated provincial tuition and education credits. The province has since modified its approach, but students should check the current provincial rules where they study.
Beyond tuition credits, students should be aware of several other tax advantages. Interest paid on student loans received under the Canada Student Loans Act, Canada Student Financial Assistance Act, or similar provincial/territorial programs qualifies for a 15% non-refundable tax credit. However, this doesn’t extend to private loans or lines of credit.
“The student loan interest credit is particularly valuable because it can be claimed in the year paid or carried forward for up to five years,” explains Rahul Sharma, an accountant with a Vancouver-based firm specializing in personal taxation. “This gives graduates flexibility to claim the credit when it provides the most benefit.”
Moving expenses present another opportunity for tax savings. Students who move at least 40 kilometers to attend post-secondary education full-time can deduct eligible moving expenses against taxable scholarship, fellowship, bursary, or research grant income.
For international students, the landscape becomes more complex. Most foreign students with a valid study permit are considered Canadian residents for tax purposes and qualify for the same credits as domestic students. However, non-resident students may face restrictions and should consult a tax professional familiar with cross-border education situations.
The GST/HST credit, while not education-specific, is particularly relevant for students with limited income. This quarterly payment helps individuals and families with modest incomes offset the GST or HST they pay. Students should file tax returns even with minimal income to access this benefit.
Digital news subscriptions, which many students maintain for research or coursework, now qualify for a tax credit of up to 15% on up to $500 in eligible subscriptions annually. For journalism or communications students, this could represent meaningful savings.
For students with disabilities, the Disability Tax Credit can provide substantial relief when combined with education credits. Additionally, the Canada Workers Benefit, enhanced in recent years, can benefit part-time student workers with lower incomes.
Parents supporting students should investigate the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB), which provide matching contributions and direct government deposits into Registered Education Savings Plans (RESPs).
“The tax landscape for students changes frequently,” notes Wilson. “The 2021 federal budget temporarily doubled Canada Student Grants until July 2023, and we’ve seen provincial programs shift repeatedly in recent years. Students should review current rules annually.”
As 2024 continues, students should gather all relevant tax documents, including T2202 forms from their educational institutions, which outline eligible tuition fees and months of enrollment. Many institutions make these forms available online through student portals rather than mailing physical copies.
For those feeling overwhelmed by the complexity, free tax clinics operated by the Community Volunteer Income Tax Program (CVITP) offer assistance to students with modest incomes and simple tax situations. Many post-secondary institutions also host these clinics during tax season.
Tax software has increasingly incorporated student-specific modules that walk users through available credits, though they may not capture all provincial variations or special circumstances.
“When it comes to education tax credits, knowledge truly is power,” Sharma emphasizes. “A little research and organization can translate to thousands of dollars in tax savings over a student’s academic career.”
