As a student, you should know the following:
- As of January 1, 2017, the federal education and textbook amounts have been eliminated. You can still carry prior year amounts forward to future years, but you cannot transfer these amounts. You can still transfer unused tuition amounts from the current tax year. Some provinces and territories are still offering the education and textbook amounts.
- You must claim tuition, education, and textbook amounts on your own return first, even if someone else paid the fees. Once your tax payable is reduced to zero, you can transfer the unused portion to a spouse, parent, or grandparent.
- You can carry forward any unused amounts and use them to reduce taxable income in a future year.
- You can only transfer current year tuition, education, and textbook amounts. You cannot transfer amounts that you carried forward from previous years.
- You can choose only one person to receive your transferred amounts. You cannot split the transfer between two people (e.g., two parents). If you are transferring both federal and provincial tuition amounts, you must transfer both to the same person.
- You can transfer a different amount federally than provincially.
- The maximum transfer in a year is $5000.
- When transferring an amount to a designated person, you should not transfer more than that person can use. That way, you can carry forward as much as possible to use yourself in a future year.
- If your spouse or common-law partner is using you for a deduction on line 30300 (spouse or common-law partner amount) or claiming other transfers from you (such as the disability amount), then a parent or grandparent can't claim your tuition and education transfer.
Interest paid on a student loan
You can claim a deduction for interest paid on your student loan.
You can carry-forward the interest paid on your student loan for five years.
- Example
-
Pat's student loan payments were $350 per month for 2023. Of each payment, $50 was for interest and $300 was principal. Pat's mother made half of the payments in 2023.
Pat didn't have net federal tax (on line 42000 of T1 General), so he didn't claim student loan interest on his 2023 return. He can carry forward the $600 in student loan interest until his 2028 return.
Pat's mother cannot claim any student loan interest on her return (only the student can claim this credit).
Tip: Be careful about how you structure your student loan repayments. If you combine your student loan with any other type of loan, for example, to consolidate loans and get a lower interest rate, you can no longer claim a tax deduction for student loan interest.