Section 3 – Education
Deductions and Credits
Tuition Tax Credit
Tuition fees for students enrolled on a full- or part-time post-secondary1 basis in Canada and, in certain instances, outside Canada2, and occupational skills courses that are not at a post-secondary school level are eligible for a non-refundable tax credit of 15%, provided they total more than $100 per establishment3. In Quebec, the $100 threshold applies to total expenses and the credit rate amounts to 8%.4 In New Brunswick, the 9.68% credit has been reintroduced since January 1, 2019 and is retroactive to January 1, 2017. Tax credit for the years 2017 and 2018 can be claimed in the 2019 tax returns.
Tuition fees include entrance fees, use of library or laboratory facilities, issuance of a certificate or diploma and related expenses charged to all students, other than payments to a student association.
Examination fees required to obtain a professional status, certification or licence allowing the individual to practice a profession or trade within Canada are also eligible for the credit.
As of 2020, tuition fees that are eligible for the credit will exclude any amount claimed for the Canada training credit.
1 Or in a professional school if the student is at least 16 years of age. 2 A student must be enrolled in a post-secondary program of study outside of Canada for a minimum of three consecutive weeks. No minimum duration is provided for a program of study being followed in an establishment in Canada. 3 No credit in Ontario and New Brunswick. 4 A transitional rule applies for certain tuition fees incurred before March 28, 2013 that are carried forward to a subsequent year.
Canada training credit
As of 2020, an individual can claim a refundable Canada training credit equal to the lesser of the following amounts:
- The Canada training credit limit for the previous year;5
- Half of the eligible tuition fees paid for the year.6
Accordingly, individuals between the ages of 25 and 64 with a minimum annual employment income7 of $10,000, to a maximum of $147,667 in 2019, can accumulate $250 per year (lifetime maximum of $5,000) in a notional account for the Canada training credit limit account. Any unused balance will expire at the end of the year in which the individual reaches age 65.
Example : In 2023, Michelle enrols in a training program and pays $1,500 in eligible tuition fees. Michelle has accumulated $250 in each of the years from 2019 to 2022 inclusive, so her Canada training credit limit for 2023 is $1,000.
Michelle can therefore claim an amount of $750 as a Canada training credit for the 2023 taxation year, which is the lesser of 50% of eligible tuition fees paid and the limit for the year, Her unused balance of the training credit limit for 2023 will be $250 and if she satisfies all the eligibility conditions in that year, she will accumulate an additional $250 and her Canada training credit limit for 2024 will therefore be $500.
5 The amount will be indicated in the notice of assessment each year. 6 Generally, eligible tuition and training fees are the same as for the tuition tax credit, excluding fees paid to an establishment located outside Canada. 7 Including income from an office or employment, certain business income, the taxable part of scholoarship income and research grants, the tax-exempt part of earnings of status Indians and emergency service volunteers, and maternity and parental benefits.
Credit for Interest Paid on Student Loans
A taxpayer may claim a non-refundable tax credit on interest paid in the year on a student loan granted under a federal or provincial program. In Ontario and New Brunswick, this credit also applies to interest paid on Canadian loans to apprentices.
Before renegotiating a student loan, remember that you cannot claim a credit for interest paid on any loan other than a loan granted under a federal or provincial program nor on a student loan merged with another type of loan.
Transfer and Carryover of Student Credits
Students must first claim the tuition tax credit and the interest tax credit on any student loans in their own tax returns. They can then carry over the unused portion of those credits or transfer them as follows:
|Carryover period||Transfer to parent or grandparent of the student and his/her spouse||Transfer to spouse|
Maximum of $5,000 in total
Maximum of $5,000 in total
|Interest on student loan||5 years10||Indefinitely||No|
8 Including New Brunswick. It is still possible to carry forward the balances for unused education and textbook tax credits for an unlimited time despite the elimination of these credits since 2017. 9 Possible under spouse transfer mechanism for non-refundable tax credits (see Section II). 10 Also applies in Ontario and New Brunswick.
To maximize the transfer of tax credits, reduce your net income as a student by maximizing the permitted deductions, such as the moving expense deductions and transfer only the amount that will be deducted by your parent.
Tax Credits for Children in Post-Secondary Studies – Quebec
A person supporting a student under 18 years old can claim a non-refundable tax credit in respect of the student if the student is enrolled in vocational training or post-secondary studies. The 2019 credit equals 15% of $2,933 per semester up to a maximum of two semesters per year and is reduced by the income earned by the student, excluding scholarships. To be entitled to it, the taxpayer must support the student who must also ordinarily live with him/her during the year. The dependent student can be the child, grandchild, brother, sister, nephew or niece of the supporting person or of his/her spouse.
Adult Child – Transfer Mechanism for the Recognized Parental Contribution
A full-time adult student in a recognized establishment can transfer the unused portion of his/her basic tax credit for 2019 up to $10,482 ($7,549 if only one semester is completed in the year) to his/her father or mother, or allocate it between the two. There is a $2,160 supplement for single-parent families who have no minor children. The transferable amount is reduced by the child’s income, excluding scholarships.
Expenses incurred for moving from one place to another in Canada or elsewhere to be at least 40 kilometres closer to an educational institution where the student will attend full-time post-secondary courses are deductible. These expenses are only deductible from amounts included in income from taxable scholarships, fellowships, bursaries and research grants. For Quebec purposes, they can only be deducted from research grants. Undeducted moving expenses can be carried forward to the following year.
Moving expenses incurred to change residence in connection with a job, including a summer job, are deductible if the conditions described in Section V are satisfied. However, the deduction may not exceed net employment income.
Keep your receipts for moving expenses (travel by plane or otherwise, meals, temporary lodging) to claim a deduction for such expenses or use the simplified method.
Child Care Expenses
See Section II.
This document is up to date as of August 1, 2019 and reflects the status of legislation, including proposed amendments at this date.