Posted by & filed under Taxation & Planning.

Tuition fees tax credit

Tuition fees qualify for a non-refundable 15% federal tax credit for 2012 if you pay them for yourself.

To be eligible for a credit, the fees must be paid to a Canadian university or college.

Generally any fees you claim must total more than $100 per institution.

Along with admission fees, eligible tuition fees include library and lab charges, examination fees, application fees, mandatory computer service fees, charges for certificates, diplomas and degrees, and the cost of books included in the fees for correspondence courses.

Also eligible are mandatory ancillary fees for health services, athletics and various other services ( but not student association fees or fees covering goods of value that you retain)

Fees paid to an education institution, professional association, provincial ministry or similar institution for an examination required to obtain professional status recognized by federal or provincial statute, or to be licensed to practise a profession or trade in Canada, are eligible for this credit.

Fees paid to  private schools for grade school or high-school education will not entitle you to a federal tax credit.

However, religious private schools may be able to provide a tax receipt for some of your tuition fees, treating that amount as a charitable donation, made toward the school’s religious instruction.

Education Amount

As a separate credit  from the tuition fees, you are entitled to a further federal education tax credit of $400 (worth $60) for each month you are in full-time attendance at a post-secondary educational institution.

For  part-time post-secondary students, the education tax credit is $120 (worth $18) per month that you attend an eligible program at least three consecutive weeks long and involving at least 12 hours of instruction per month.

Students with disabilities may qualify for the full $400 per month credit even if they attend the institution only part-time.

Textbook tax credit

Post secondary students eligible to claim the education amount above, can also claim a non-refundable textbook tax credit to help cover the costs of their textbooks. The amount you can claim for the credit is based on:

  • $65 for each month you qualify for the full-time education tax credit amount.
  • $20 for each month you qualify for the part-time education tax credit.

Transfer of unused student credits

If you are unable to use your tuition, education and textbook credits in 2012, because you have no tax to pay, up to $5,000 in combined federal credits can normally be transferred to your spouse or to a parent or grandparent.

Alternatively, you can carry forward any unused and untransferred tuition, education and textbook amount and claim them against your taxable income in later year,

Note, however, that such amounts carried forward cannot be transferred, only the student can claim them in later years.

Documentation taken from the KPMG website, click link. You may request your Tax Planning for you and your family, complimentary copy by writing to KPMG.

Here is the link to Canada Revenue tax guide for your 2012 personal taxes

Discussion Questions:

  1. Why does our Canadian Tax System have so many rules and regulations?
  2. Should we consider simplifying our Federal Income Tax Act?
  3. Based on the above do you find the textbook tax credit is sufficient to cover the cost of your textbooks?


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