Canada Revenue Agency has tax credits, deductions and benefits to help students. (photo from CRA)
The Canada Revenue Agency (CRA) has tax credits, deductions and benefits to help students, and here are some tips to ensure students get them. First, of course, is to file on time.
Most Canadian income tax and benefit returns for 2015 are due on April 30. However, since this date is a Saturday, CRA will consider your return as filed on time and your payment made on time if it receives your submission or it is postmarked by midnight on May 2, 2016. Self-employed individuals and their spouses or common-law partners have until June 15, 2016, to file their income tax and benefit returns, but any balance owing is still due no later than May 2, 2016.
Claim eligible tuition fees. You should have received an official tax receipt or a Tuition, Education and Textbook Amounts certificate from your educational institution with the total eligible fees paid for the tax year.
Claim the education amount. If you are a full-time student (or a part-time student who can claim the disability amount or has a certified mental or physical impairment), you can claim $400 for each month you were enrolled in an educational institution. If you are a part-time student, you can claim $120 for each month you were enrolled.
Claim the textbook amount. If you are entitled to claim the education amount, you can claim $65 for each month you qualify for the full-time education amount or $20 for each month you qualify for the part-time education amount.
Claim the interest paid on student loans. You may be able to claim an amount for the interest paid on your loan in 2015 for post-secondary education. You can also claim interest paid over the last five years if you haven’t already claimed it. Only interest paid on loans received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Canada Apprentice Loans Act or similar provincial or territorial legislation for post-secondary education can be claimed.
Claim the public transit amount. If you use public transit, you may be able to reduce your taxes owing by claiming the cost of your transit passes (cra.gc.ca/transitpass). Keep your transit passes for local buses, streetcars, subways, commuter trains or buses and local ferries, and enter your total public transit amount on line 364 of Schedule 1, Federal Tax.
Claim eligible moving expenses. If you moved for your post-secondary studies and you are a full-time student, you may be able to claim moving expenses. However, you can only deduct these expenses from the part of your scholarships, fellowships, bursaries, certain prizes and research grants that has to be included in your income. If you moved to work (including summer employment) or to run a business, you can also claim moving expenses. However, you can only deduct these expenses from the net income you earned at the new work location. To qualify, your new home must be at least 40 kilometres closer to your new school or work location.
Claim the GST/HST credit. If you have low or modest income, you are a resident of Canada and 19 years of age or older, you may be eligible for the goods and services tax/harmonized sales tax credit. You do not have to apply for this credit – the CRA will determine your eligibility when you file your return and send you a credit notice if you qualify for it.
Claim child-care expenses. If you have to pay someone to look after your child so you can go to school, you may be able to deduct child-care expenses.
If you need help filing your return, and you have a modest income and a simple tax situation, volunteers from the Community Volunteer Income Tax Program may be able to prepare and submit your return for you. To find a free volunteer tax preparation clinic near you, go to cra.gc.ca/volunteer.
CRA’s secure My Account service is a one-stop shop for managing your tax and benefit information. Using My Account, you can track your return status, change your address, check your RRSP and TFSA limits, register for online mail, print proof of income, and so much more. When you register for online mail, CRA will no longer print and mail you eligible correspondence. Instead, CRA will send you an email when you have mail to view in My Account. You can also securely access your information with the MyCRA app (cra.gc.ca/mobileapps), which uses the same login information as My Account.
You can get your income tax refund and your credit and benefit payments directly paid into your account at a financial institution in Canada (cra.gc.ca/directdeposit). And, new this year, the CRA’s Auto-fill My Return service (cra.gc.ca/auto-fill) is available through some certified tax preparation software. This secure service automatically fills in certain parts of your income tax and benefit return.
If you are an international student studying in Canada, you first have to determine your residency status at cra.gc.ca/internationalstudents. You may owe taxes to the Canadian government and may qualify for GST/HST credit payments. If you have questions, call the CRA’s international tax and non-resident enquiries line at 1-800-959-8281.
For more information, go to cra.gc.ca/students.