Prior to January 1, 2017, federally, and September 5, 2017, provincially, any student who was enrolled at and taking classes at an accredited post-secondary institution both within Canada or abroad was eligible to claim tuition, education, and textbook tax credits in their personal income tax return. There was both a federal tax credit and a provincial/territorial tax credit associated with these policies.
While students were not able to generate a tax refund using any of these credits, they were able to carry forward any unused tuition, education, and textbook tax credits to future years. In addition to the student, themselves being able to carry forward the tax credits, they were also able to transfer any current year unused amounts to qualifying relatives up to a maximum of $5,000 per year, per student.
Effective January 1, 2017, the education and textbook tax credits have been eliminated at the federal level for the year 2017 and beyond. Students are no longer be able to claim any education or textbook credits to lower the total amount of federal income taxes they owe. They can however, still use all of the tax credits that they have accumulated from year’s past that have been carried forward. The tuition tax credit is also still available at the federal level with no changes to it.
As of September 5, 2017, at the provincial tax level in Ontario, all of the tax credits have been eliminated and going forward students are not able to claim any new tuition, textbook, or education tax credits. They can however, still use the amounts carried forward from previous years.
Please contact us here at S+C partners LLP if you have any questions regarding the changes mentioned above.