Canada’s tax law allows you to claim tuition and some other expenses as refundable tax credits if you had paid to follow educational programs outside of the country as well.
To be eligible for the Canada Tuition Tax Refunds, this educational institution outside of Canada has to be recognized as an institution of higher education in that country, and allowed to issue a degree equivalent to bachelors or higher. Canada Revenue Agency (CRA) offices have a list of accredited foreign educational institutions. If your institution is not listed, the institution can apply to the CRA.
But even if your institution is not listed by the CRA, you might be able to claim the tax credits, provided it meets CRA criteria.
Also, you should have been enrolled as a full-time student for courses that were at least three consecutive weeks long and will lead to a degree at a bachelor level or higher. Until 2010 tax year, you had to follow at least a 13-week long course.
And only ‘full time’ students can apply for the claims. In other words, if you were attending a few evening classes, or you were taking your courses through correspondence, or your primary occupation was other than studying and you were just taking a minor course load, then you are not considered ‘full time’. But if you were a full time employee and were taking a major course load, then you are considered a full time student.
You can file claims for the following:
- Admission fees
- Fees/Charges paid to use the library or the lab facilities
- The cost of ID card (must exceed $ 100.00)
- Certain pre-requisite study materials (must exceed $ 100.00)
- Exam fees
- Application fees (if the student later enrolls in the institution)
- Charges for a certificate, diploma, or degree
- Mandatory computer service fees
- Academic fees
• Travel costs
• Parking costs
• Equipment such as lab coats, calculators, computers or other items of ‘enduring value’.
• You cannot claim fees that were reimbursed to you or to a parent or spouse on your behalf, unless the reimbursed amount is also included in the filing. That is, you can only deduct eligible tuition fees minus the amount received as a tuition reimbursement.
• The receipt provided by the institution must clearly state the name and the academic level of the program to be eligible for a successful claim.
• The amount should be in Canadian dollars, which can pose a challenge as usually receipts will be in the currency of the country where the institution is located, or in US dollars.
• Unused tax credits can be transferred to your spouse for him or her to claim under certain conditions.
• For exams taken in 2011 and later years, you can also claim the following:
o Exam fees paid to an educational institution, professional association, provincial ministry or other similar institution, to take an occupational, trade or professional examination required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified as a tradesperson, to allow you to practice the profession or trade in Canada.
Avoiding Double Taxation
During your stay abroad as a student, it is possible you will engage in some sort of employment to boost your finances.
This has to be reported in your tax claim, but there are chances your income might also be taxed in that country.
To avoid this double taxation, check whether Canada has a tax treaty with that country. You could be restricted or exempted from paying tax in that country, or you can deduct the taxes paid in your Canadian tax return.
To make the claims for your studies abroad, the educational institution has to complete and return to you the form TL11A – Tuition, Education, and Textbook Amounts Certificate – University Outside Canada.
For more information on students living near the border with the USA and studying there, or what the exceptions are, visit the CRA’s Tuition Tax Credit Bulletin.