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
future years (no limit to carry-forward period), or you can transfer the costs to your spouse,
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
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
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.
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.
If you moved to ON from QC, use the federal amount,
otherwise use the provincial amount
If you moved to PE from QC, use the federal amount,
otherwise use the lower of the provincial or federal amount.
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. 718.104.22.168 and 722.214.171.124.
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.