Tuition, Education & Textbook Amounts

Tuition, Education & Textbook AmountsTuition, Education & Textbook Amounts 

Students often fail to claim tuition credits when filing their tax returns for those years in which they are attending a post-secondary institution. These are important credits that not only yield immediate returns, but may also derive benefits in future years.

A salient aspect of tuition credits is their versatility. Not only are they transferable to a parent or grandparent, but they currently feature an indefinite carry-forward period. As such, it is incumbent on students not to overlook them when filing. For most students attending a post-secondary institution in Canada, they require a T2202-A form supplied by the college or university. For those attending a university outside of Canada, they can request a form TL11A be filled out by their institution to be eligible to claim the tuition.

Tuition credit eligibility requirements:

1)      The tuition expense must amount to more than $100.

2)      Tuition fees paid to a post-secondary institution outside of Canada must be attributed to a program running for at least 13 consecutive weeks.

3)      The student attending must be at least 16 years of age at the end of the taxation year.

The different credits explained…

Tuition fees paid 

The fees paid to the institution. This is usually the full sum minus any administrative costs associated to the university or college. Since annual tuition fees usually span parts of two calendar years (generally from September to April), whereas taxes are calculated from January to December, the T2202 form is important in outlining the portion of costs associated with each semester within the taxable calendar year.

Education Amounts

Education amounts are credits accrued for each month, either full-time or part-time, that a student attends a qualifying program. These have not changed since 2001, when the government increased the credits to $400 for full-time and $120 for part-time.  

Textbooks tax credit

This credit was a government initiative commencing in 2006 and has remained unchanged since. It, too, is a cumulative monthly credit obtained on the basis of full-time ($65/month) or part-time ($20/month) attendance.

Remember, all tuition-related tax credits are non-refundable, meaning that one can only receive a refund when they have a tax liability. That is why most students will not receive a refund during their full-time attendance at a post-secondary institution. However, given the aforementioned carry-forward nature of these credits, students should still make sure to file their taxes annually. 

Transferring the amount  

One can always transfer the tuition amounts if they cannot use them to reduce their own tax liability. The remainder can be transferred to:

1)      Spouse or common-law partner

2)      The parent or grandparent of oneself, one’s spouse or common-law partner

The maximum allowable transferable amount federally is $5,000 despite the fact that a full-time university tuition credit will often exceed $5,000.

 

Disclaimer: The information contained herein is not meant to be professional advice but for educational purposes only. You should consult with your accountant when handling such matters.

 

The Healthy Home Renovation Tax Credit

The Healthy Home Renovation Tax CreditSince the Home Renovation Tax Credit came and went in the 2009 taxation year, my clients consistently inquire about writing-off their renovations. The Ontario government has in fact brought back a semblance of the Home Renovation Tax Credit, with some key differences, this time calling it the Healthy Home Renovation Tax Credit.

The credit is a refundable personal income tax credit applied to seniors and individuals living with senior family members. Qualified individuals will receive a 15% credit on all eligible expenses up to $10,000 worth of home improvements; equating to $1,500 in refunds. The fact that it’s a refundable tax credit means that you will receive the refund without exception, even if you have not paid taxes, unlike the federal credit in 2009 for which only individuals meeting minimum taxable income requirements were qualified to receive the refund.

The eligibility of renovation expenses is another point of difference between the new credit and its former incarnation. Where the Home Renovation Tax Credit covered most home renovations, the Healthy Home Renovation Tax Credit doesn’t allow simply for value-added renovations or recurring maintenance expenses, such as window installation or home repairs. The renovations must be specifically applied for the purposes of making the home safer and/or more accessible for seniors, such as walk-in bathubs, motion-activated lighting, handrails in corridors etc.
For more information on which expenses qualify visit the Ontario government website a very well put brochure is available at your convenience.

http://www.ontario.ca/taxes-and-benefits/find-freedom-your-home

 

Disclaimer: The information contained herein is not meant to be professional advice but for educational purposes only. You should consult with your accountant when handling such matters.