STUDENTS
CRA publication P105, Students and Income Tax, provides a detailed explanation of income tax topics of special significance to students.
Deductions commonly claimed by students:
Moving expenses
A student must be enrolled full-time to deduct moving expenses.
Moving expenses to attend an educational institution, or leave the institution at the end of a term, can only be deducted from taxable scholarships, fellowships, bursaries, certain prizes, and research grants.
Moving expenses incurred to move to a location where the student had summer employment can only be deducted from employment or self-employment income earned at the job location. Expenses for moving back to the university are also deductible.
Benefits and refundable tax credits special to students:
If a person has a T2202 Tuition and Enrolment Certificate reporting tuition or training fees, the person can claim a refundable credit of up to 50% of the fees if they have a sufficient balance in their Canada Training Credit Limit. It is not automatically claimed in UFile – steps must be taken to claim it.
Non-refundable tax credits special to students:
Tuition fees paid in a tax year can be claimed if the person has a T2202 certificate. The maximum amount that can be claimed is the fees minus the Canada training credit, if any, plus unused tuition amounts carried forward from previous years. A tuition amount for the tax year (but not carried forward amounts) can be transferred to a spouse, parent or grand-parent. Unused tuition amounts can be carried over to future years but must be used as soon as the person can utilize it to reduce tax.
Interest can be claimed in the year it is paid. It can’t be transferred but it can be carried forward up to five years. See the document on this topic for more information.
No more credit for textbooks:
The federal tax credit for textbooks was eliminated after 2016.
Scholarships, fellowships, bursaries (‘awards’):
Awards are reported in box 105 of T4A slips. Some or all of an award may be tax-exempt. Awards given for full-time post-secondary programs in Canada are tax exempt. For students of part-time programs, the exemption is at least $500, but no greater than tuition plus the costs of program-related materials such as textbooks and school supplies.
OSAP Grants:
OSAP grants are treated as a bursary for tax purposes, and taxed the same as scholarships. A T4A will be issued with an amount in box 105.
Can payment for student residence be declared as rent for the Ontario Trillium benefit – Energy and Property Tax Credit?
No. However a student can declare that they lived in a residence which will result in a $25 Energy and Property Tax Credit. In UFile for ON-BEN, there is a declaration category for living in a residence. If a student is unsure whether the place they lived is a ‘student residence’ or not, a check can be made against Ontario’s list of student residences.
At the outset it is necessary for the student to determine if they are a Canadian resident for tax purposes.
References:
P105 - Students and Income Tax