Tax Tip 4

Students! I receive so many emails and phone calls from parents about their children in College and University. It’s a whole new world out there! Unfortunately, parents cannot claim their children’s rent, moving expenses or tuition. Students must claim their own tuition, rent and moving expenses. In terms of tuition, a student, as long as they did not make more than $11,327 during the taxation year, can transfer up to $5,000 of their tuition and education tax credits to one parent. It is preferable if all tax returns of student and parent(s), are done at the same time by the same tax preparer to maximize deductions for all parties concerned. Either way, the student MUST claim their tuition on their taxes to determine the amount of the transfer PRIOR to a parent claiming the transfer on their income tax return.

A student cannot deduct expenses such as books, laptops or equipment they had to buy to take their course. When they receive their T2202 from their college or university, notice that there is a column B and C on the form showing the number of part-time and full-time months they attended school. For each month they attend school, they are given an education & textbook amount (Part Time: Education $120 Textbook: $20 / Full-Time: Education $400 Textbook: $65). These amounts form part of the tuition credits that can either be transferred to a parent, grandparent or spouse or accumulated to use in later years when the student earns an income full-time.

Most institutions no longer mail these slips so they must be downloaded and printed through student accounts. If a student is attending a college or university that is not in Canada, they will be provided with a TL11-A which is the equivalent of the Canadian T2202A (but most of the time it is not provided automatically – they have to ask for it).

For more information on this topic, visit http://sauvetaxservices.ca/tax-tips-2/students/