What’s New for 2020 Tax Returns:

Tuition and Education Tax Credits

Tuition fees paid to accredited post-secondary schools and reported on a Tuition Tax Credit form (T2202A) are deductible. The claim must be made first by the student and then, to the extent the deduction is not needed by the student, it may be transferred to a parent/grandparent or spouse to a maximum transfer of $5,000 annually. (The Education Tax Credit, which previously provided a credit of $120 per month for full-time and $60 per month for part-time students, was eliminated in 2017.)

All unused tuition credits carry over to future years for the use of the student. This also applies to foreign educational institutions provided they are willing to issue the tax receipt and are recognized as accredited by CRA. Visit the following link to learn more about the tax credits and implications of attending school outside Canada:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-323-your-tuition-education-textbook-amounts.html

Please note that any student transferring tuition to a family member must file a tax return and must complete and sign the form showing they authorize the transfer. They must provide their parent or spouse the signed form for inclusion in their tax returns.

Scholarships and Bursaries

Scholarship and bursary income for elementary and secondary schooling is not taxable. Scholarships for post-secondary students who have tuition fees paid in the same year are also non-taxable, where the courses lead to a diploma or degree.

Part-time students may exempt scholarships up to the extent of the tuition fees and materials costs. Above that, the amounts received will be taxable.

Research grants are taxable, and expense receipts should be kept as they may be deducted against the value of the grant received. It is important to separate expenses the grant covered from other business expenses.

Examination and Licensing Fees: Tuition and Education Tax Credits

Exam and licensing fees paid by students to obtain professional standing or certification as may be required to operate a professional practice or trade are, since 2011, included in the tuition fees and claimable as a tax credit. Tuition fee tax receipts are available directly from your educational institution and are required for tax filing.