As a student, tax returns are typically more straightforward, as students do not have much employment income, which makes filing a tax return less tedious. The most challenging part of filing a student’s tax return is claiming tuition, textbook, and education amounts. Below are some tips to help students save on taxes.
Gather Tax Slips
Before filing a tax return, you must gather all the necessary documents and tax slips.
- T4- Statement of Remuneration Paid – if you have been working while attending school, you will receive a T4 slip from your employer. If you work in the hospitality industry, you also need to claim any tips and gratuities as income.
- T4A -Statement of Pension, Retirement, Annuity, and Other Income – if you have received any other income for different reasons, you will get a T4A tax slip. Heres examples of the different types of income that are reported on a T4A slip.
- Education Assistance Payments – from a registered education savings plan (RESP).
- Financial awards – including scholarships, fellowships, bursaries, artists’ project grants, and prizes.
- T4E – Statement of Employment Insurance Benefits –students who have received tuition assistance will receive a T4E slip showing if their help is taxable or non-taxable.
- T2202 -Education and Textbook Amounts Certificate -some colleges and universities will provide or mail a tax slip, but most schools leave it to the student to retrieve the information electronically. If you pay tuition to an eligible college or university, you need to download this tax slip as it has vital information for claiming education, schooling, and textbook amounts.
As you gather information and tax slips, make sure to keep track of all expenses and documents that need to be reported and included in your tax filing.
Claim Tuition, Education, and Textbook Amounts
College and university students, whether part-time or full-time, claim tuition, education, and textbook amounts. Learn about tuition tax credits and how they can save on taxes. The federal tuition tax credit is one of the top tax credits for post-secondary students. Even if a student has no income to report, they can still use this credit to claim an eligible tuition fee (over $100) paid to take courses at school. Students can also claim any fees paid to an educational institution to take classes or develop or improve their occupation skills, as long as the institution is certified and you have the receipts.
Eligible Tuition Fees
Typically, any course taken at an institution will qualify for a tax credit if it meets these requirements:
- Taken at an eligible post-secondary education institution
- Individuals 16 years or older by the end of the year who are improving or developing skills in a career and the educational institute is certified
If you received a scholarship for an occupational skills course, you might be eligible to claim a scholarship exemption. The form you receive from your educational institution will state the number of qualified tuition fees you paid for the tax year. To qualify, the fees paid for each educational institution must be more than $100.
Fees paid to education institutions, professional associations, or similar institutions for someone to make a trade or professional exam required to obtain their licensing or certificate, such as a tradesperson, can be eligible for the tuition tax credit.
Tuition deductions are non-refundable tax credits. If you do not have sufficient taxable income and do not need to use the total amount to reduce payable tax, there are two options to consider:
- You can choose to carry forward the amount to a future year, but you must claim the carry forward amount if the first year you have tax payable.
- You can also choose to transfer the credit. Any unused amounts can be transferred to your parents, grandparents, or spouse/common-law partner.
Tax Return | Final Thoughts
Tax credits change from year to year, so it’s always best to check with a professional to ensure that you are claiming as many credits as you can to save on your taxes. The most crucial piece of information to remember when it comes to taxes is to keep all of your receipts and documents to back up the information in your tax filing.