Tuition Tax Credit for Students and Parents

We need a well educated work force for Canada to stay an advanced and developed country. Federal Government understands it and that is why they offer extensive tax incentives to go to school and continue higher education.

Even with recession and unemployment, education cost is rising. StatCan estimated that 90% of students faced an increase in cost of going to school.

Students and parents carry the bulk of increased education cost. But these amazing Tuition Tax Credits can reduce this burden somehow.

Anyone registered to go to school and pays tuition, the university or college issues a form T2202A to the student that states the tuition credit they can claim.

Students must use their tuition tax credit first to reduce their tax liability. If there are tuition cost left, the student can choose to carry it forward for the amount for future tax years or transfer up to $5,000 to a parent, grandparent or spouse in the current tax year.

The student has to make the decision to transfer the credit to someone eligible to claim the tax credit and must sign the form T2202A authorizing the transfer.

Beside the tuition fees on form T2202A, a full time student can also claim $400 per month in education amount and $65 per month in textbooks expense amount for the duration of the months he was a full time student.

A part time student can claim $120 per month in education amount and $20 per month in textbooks amount for the time he was a part time student.

Even if a student has no income, he/she must file their tax return to take advantage of tax credits and benefits. They should be able to carry the tuition amount forward until they can use it or can transfer it to their parents. Also, a student should file tax return and when he/she turns 19, might be eligible to receive the quarterly GST/HST payment.