Tax Tips for Students
As a student you are entitled to several benefits and tax credits that may give you a tax refund on your tax return.
You may be entitled to a refund on some of the CPP and EI contribution you paid on your summer job. Being a student once you turn 18, your employer is required to withhold CPP (Canada Pension Plan) and EI (Employment Insurance). You will be asked by your employer to fill in out a TD1 and TD1 On forms when first hired. These forms help the employer calculate how much tax should be withhold from your income.
Not all of your student Income is taxable Since the 2008 year income from scholarships, fellowships, bursaries are tax exempt provided the related program qualifies for the education amount. This does not apply to Research Grants, but you may deduct expenses incurred to complete the research.
Tuition Fee Being a student you do get to claim tuition fee over $100.00 as a tax credit. Students receive a T2202A this form allows you to claim tuition. This form is like an official Income tax receipt.
Education Amount Being a student you may also claim the educational amount of $400/month for the full –time months you were in school and $120/month for part-time month you were in school. To qualify for this credit you must attend a program of at least three consecutive weeks and a minimum of 12 hours of courses each month.
Textbooks Credit The textbook credit allows students to receive a $65.00 credit /month for full time students, and $20.00 credit /month for part-time students. This credit is to help with the cost of books, but the credit does not depend on how you spend on books. Textbooks receipts are not required.
Student Loan Interest Only the interest paid on a Government Student loan is tax deductible. If you are funding your education through a line of credit or personal loan from a financial institution, the interest is not tax deductible.
Carry-forward Tuition Amount and Unused Credits. The tuition fee and education amount you do not utilized this year can be transferred, and they can also be carried-forward on your tax return, this gives you the opportunity to utilize them in a year when your income is higher.
These are some of the advantages of being a full-time or part-time student. However, there may be other credits or benefits that you may be able to claim on your tax return. Filling your tax return is the only way for you to receive all the benefits available to you.
Your time is valuable, why not let us prepare your Student Income Tax return.