TaxTips.ca
Canadian Tax and
Financial Information
Transfer or Carry-forward of Student Tax Credits

TaxTips.ca does not research or endorse any product   or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Looking for US tax information?
See
USTaxTips.net

Need an accounting, tax or financial advisor? Look in our Business Directory.     Stay Connected with TaxTips.ca!  Internet Explorer - Use compatibility view for calculators to work properly!

Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Business Directory
Advertise With Us
Contact Us/About Us
Links & Resources


Filing Your Return - Students -> Transfer or carry-forward of unused tuition, education or textbook amounts

Transfer or Carry-Forward of Unused Tuition, Education or Textbook Amounts

Income Tax Act s. 118.8, 118.81, 118.9, 118.91

If you do not have enough income to utilize your total tuition costs, education amount or textbooks amount, you can either carry forward these amounts to future years (no limit to carry-forward period), or you can transfer the costs to your spouse, common law partner, or to a parent or grandparent of you or your spouse or common law partner.  The maximum amount that can be transferred to a spouse, parent or grandparent is $5,000(note 1), less the costs claimed by the student.  This may still result in costs remaining that can be carried forward.  The transfer of costs to another person should not be more than can be utilized on their tax return.  Then any excess costs can still be carried forward.

Note 1: re the maximum amount transferable:  $5,000, less the amount being claimed by the student in the year, is the maximum federally and in all provinces and territories except Ontario and Québec.  The Ontario maximum for 2012 is $6,503 (2013 is $6,620), less the amount being claimed by the student in the year.

Once unused costs have been carried forward, they cannot be transferred to anyone in a future year.  In future years, the carried forward amounts are claimed by completing both the federal Schedule 11 of the tax return, and the provincial S(11) schedule.  Carried forward amounts must be claimed in the first year that tax is payable.  Only the amounts required to reduce taxes to zero would be claimed, and any remainder would again be carried forward.

There is a Federal tax credit as well as a provincial or territorial tax credit for tuition, education and textbook amounts.  For this reason, to claim these amounts, or to transfer them to another person, you must complete both the Federal Schedule 11 of your tax return, and the provincial S(11) schedule.  You must also designate the individual, and specify the federal and provincial amounts that you are transferring to them, on your Form T2202, T2202A, TL11A, TL11B, or TL11C.  Québec uses Schedule T for tuition or examination fees being claimed or carried forward.  The unused amounts carried forward on the federal Schedule 11 will often be different from the unused amounts carried forward on the provincial S(11) schedule.  When claiming the carried forward amounts in the following year, make sure you use the federal amounts when completing your Federal Schedule 11, and the provincial amounts when completing your provincial S(11) schedule.  The federal and provincial (except Québec) forms are available on the Canada Revenue Agency (CRA) website.

Amounts cannot be transferred to both a parent or grandparent and to a spouse.  If part of the tuition, education and textbook amounts are transferred to a parent or grandparent,  they will claim this on line 324 of their tax return.  Amounts transferred to a spouse will be included on your Schedule 2, and their Schedule 2, and they will claim this amount on line 326 of their tax return.

Tuition Transfers and our Tax Calculator

If someone has transferred tuition to you, you can enter it in the detailed Tax Calculator as if it is your own tuition.  However, there is no check as to whether you are exceeding the allowable amount.

Tuition Transfers and Dividend Income

If a student has significant Canadian dividend income (probably an unusual situation), it is possible that no transfer of tuition/education amounts will be allowed, even though the student may not need the entire tax credit.  This is because the amount of the tuition/education tax credit used by the student is calculated before the dividend tax credit is deducted.  The result may be that the entire tuition/education amount is utilized, but not the entire dividend tax credit.  Unfortunately, the unused dividend tax credit cannot be carried forward.  If the student has a spouse, in some situations the dividend income can be transferred to the spouse.  This would also probably enable a transfer of part of the tuition/education amounts to the spouse.

In Québec, the situation is a little different if there is a spouse, because unused credits can be transferred to the spouse, including unused dividend tax credits.

Moving to another province

If you moved to another province after carrying forward tuition and education amounts, then you will use the federal unused tuition and education amounts from your notice of assessment as a carry-forward when completing the provincial Schedule 11 for your new province of residence, unless you moved to Ontario, Prince Edward Island, or Québec.

bullet If you moved to ON from QC, use the federal amount, otherwise use the provincial amount
bullet If you moved to PE from QC, use the federal amount, otherwise use the lower of the provincial or federal amount.
bullet If you moved to QC from any other province, when completing Schedule T, use the tuition amounts shown on your prior year T2202A, as long as they do not exceed the carried forward amount shown on your notice of assessment.  In Québec, the education and textbook amounts from previous years cannot be utilized for the provincial tax credit.

The above will be done automatically if a software package is used to file your return, using the amounts that you enter as  federal and provincial carried forward amounts.  If you are using manual forms, the above information is found on the bottom of each provincial Schedule 11 form, except for the Québec form.  The Québec reference for this is Québec Taxation Act s. 752.0.18.10 and 752.0.18.13.

Tuition claims in year of death

In the year of death, the tuition, education and textbook amounts from the current year or from carried forward amounts may be split between the final tax return and the "rights and things" tax return in order to maximize the tax credit.  Unfortunately, it is still possible for a portion of these amounts to not be utilized.  Current year tuition and education amounts can be transferred in the year of death, but not carried forward amounts.

See also Tax Information for Students.

Further information on the CRA website:

bullet Line 323 Tuition, education and textbook amounts
bullet P105 Students and Income Tax Pamphlet
bullet The following income tax folios were published on March 28, 2013 in consultation format to allow for feedback from the tax community.  They will be available until June 28, 2013:
bulletS1-F2-C1: Education and Textbook Tax Credits
bulletS1-F2-C2: Tuition Tax Credit

 

Revised: December 27, 2013

 

 

Copyright © 2002 - 2014 Boat Harbour Investments Ltd. All Rights Reserved  See Reproduction of information from TaxTips.ca

Facebook | Twitter | Google + | Monthly Newsletter Sign-up | What’s New E-mail Notification | RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage.  See our Business Directory for tax, accounting and finance-related firms in your area.
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.