Can a student or supporting parent claim living costs as a tax deduction?

Gena Katz, a chartered accountant and principal with Ernst and Young, has the answer.

Gena Katz 9 October, 2003 | 1:00PM
Dear Expert:

My son is away at university in another province and living in an apartment this year. Are there any living expenses, such a rent or other living costs related to the cost of education that he (or I, as his supporting parent) could claim as a tax deduction or credit?

Expert Answer:

Rent in relation to one's residence is usually a personal expense and thus not deductible for tax purposes. In addition, rent is not one of the expenditures considered for the tuition and education tax credits available to students and parents. However, there may be some tax relief in respect of rent in Ontario, Manitoba or Quebec.

These provinces provide refundable property tax credits on rent/property taxes paid in the year if the individual claiming the credit resides in the province on Dec. 31. However, in Ontario and Quebec, these credits generally are available only to low income earners.

The formulas for computing these credits are complicated, combining income, the amount of rent/property tax and the sales tax credit. In Ontario, the credit starts to erode when income is over $4,000 and is reduced by 2% of income in excess of that amount, but because the base for credit depends on the amount of rent/tax paid, I can't tell you what income level would reduce it to nil. In Quebec, the credit erodes at income over $26,700. In Manitoba, there is no ceiling; some credit is available at all income levels.

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Gena Katz

Gena Katz