Dear Expert:
What is the most advantageous way for a Canadian university student to claim tuition fees and other expenses? What expenses can be claimed, such as books and rent? Expert Answer:
Tuition fees paid to a qualifying educational institution generally qualify for the tuition credit. To claim the credit on your income tax return, the school must have provided you with an official tax receipt or a completed Form T2202A ("Tuition and Education Amounts Certificate").
Tuition fees include such fees as library and laboratory fees. However, other expenses such as books, rent and living costs are considered to be personal living expenses and are not deductible in any way. Moving expenses may be deductible, but only against certain types of income.
The tuition credit can be claimed by the student, carried forward for up to five years, or transferred (to a maximum of $5,000) to a parent or grandparent. In addition, students also may claim an educational status credit of $400 for each month of fulltime enrolment at a qualifying institution. Note that both the tuition and educational credits are non-refundable amounts, which means they have value only to the extent the individual making the claim has taxable income.
From a planning point of view, it may be advantageous for a student who does not pay any tax to transfer up to $5,000 per year of unused tuition or education amounts per year to a parent or grandparent. Alternatively, the student may wish to carry forward this tuition credit to claim in a future year when he or she has higher taxable income.
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