2- Deductions and credits

Tuition Tax Credit

Tuition fees for students enrolled on a full- or part-time post-secondary¹ basis in Canada and, in certain instances, outside Canada², and occupational skills courses that are not at a post-secondary school level are eligible for a non-refundable tax credit of 15%, provided they total more than $100 per establishment.³ In Quebec, the $100 threshold applies to total expenses and the credit rate amounts to 8%.⁴ In New Brunswick, the credit is calculated at 9.40%.

Tuition fees include entrance fees, use of library or laboratory facilities, issuance of a certificate or diploma and related expenses charged to all students, other than payments to a student association.

Examination fees required to obtain a professional status, certification or licence allowing the individual to practice a profession or trade within Canada are also eligible for the credit.

Tuition fees that are eligible for the credit exclude any amount claimed for the Canada training credit.

Canada training credit

An individual can claim a refundable Canada training credit equal to the lesser of the following amounts:

• The Canada training credit limit for the previous year;⁵
• Half of the eligible tuition fees paid for the year.⁶

Accordingly, individuals who are at least 25 years old and less than 65 years old with a minimum annual employment income⁷of $11,511, to a maximum of $165,430 in 2024,⁸ can accumulate $250 per year, since 2019, (lifetime maximum of $5,000) in a notional account for the Canada training credit limit account. Any unused balance will expire at the end of the year in which the individual reaches age 65.

Example: In 2025, Michelle enrols in a training program and pays $2,000 in eligible tuition fees. Michelle has accumulated $250 in each of the years from 2019 to 2024 inclusive, so her Canada training credit limit for 2025 is $1,500.

Michelle can therefore claim an amount of $1,000 as a Canada training credit for the 2025 taxation year, which is the lesser of 50% of eligible tuition fees paid and the limit for the year. Her unused balance of the training credit limit for 2025 will be $500 and if she satisfies all the eligibility conditions in that year, she will accumulate an additional $250 and her Canada training credit limit for 2026 will therefore be $750.

Credit for Interest Paid on Student Loans

A taxpayer may claim a non-refundable tax credit on interest paid in the year on a student loan granted under a federal or provincial program. In Ontario and New Brunswick, this credit also applies to interest paid on Canadian loans to apprentices.

Before renegotiating a student loan, remember that you cannot claim a credit for interest paid on any loan other than a loan granted under a federal or provincial program nor on a student loan merged with another type of loan.

Transfer and Carryover of Student Credits

Students must first claim the tuition tax credit and the interest tax credit on any student loans in their own tax returns. They can then carry over the unused portion of those credits or transfer them as follows:

To maximize the transfer of tax credits, reduce your net income as a student by maximizing the permitted deductions, such as the moving expense deductions and transfer only the amount that will be deducted by your parent.

Tax Credits for Children in Post-Secondary Studies – Quebec

Minor Child

A person supporting a student under 18 years old can claim a non-refundable tax credit in respect of the student if the student is enrolled in vocational training or post-secondary studies. The 2024 credit equals 14% of $3,717 per term up to a maximum of two terms per year and is reduced by the income earned by the student, excluding scholarships. To be entitled to it, the taxpayer must support the student who must also ordinarily live with him/her during the year. The dependant student can be the child, grandchild, brother, sister, nephew or niece of the supporting person or of his/her spouse.

Adult Child – Transfer Mechanism for the Recognized Parental Contribution

A full-time adult student in a recognized establishment can transfer the unused portion of his/her basic tax credit for 2024 up to $13,280 ($9,563 if only one term is completed in the year) to his/her father or mother, or allocate it between the two. There is a $2,554 supplement for single-parent families who have no minor children. The transferable amount is reduced by the child’s income, excluding scholarships.

Tax credit for new graduates working in a region

A recent graduate who finds a job in an eligible region within 24 months of graduating may be eligible for a tax credit (see Section V).

Moving Expenses

Expenses incurred for moving from one place to another in Canada or elsewhere to be at least 40 kilometres closer to an educational institution where the student will attend full-time post-secondary courses are deductible. These expenses are only deductible from amounts included in income from taxable scholarships, fellowships, bursaries and research grants. For Quebec purposes, they can only be deducted from research grants. Undeducted moving expenses can be carried forward to the following year.

Moving expenses incurred to change residence in connection with a job, including a summer job, are deductible if the conditions described in Section V are satisfied. However, the deduction may not exceed net employment income.

Keep your receipts for moving expenses (travel by plane or otherwise, meals, temporary lodging) to claim a deduction for such expenses or use the simplified method.

Childcare Expenses

See Section II.

¹ Or in a professional school if the student is at least 16 years of age.

² A student must be enrolled in a post-secondary program of study outside of Canada for a minimum of three consecutive weeks. No minimum duration is provided for a program of study being followed in an establishment in Canada.

³ No credit in Ontario.

⁴ A transitional rule applies for certain tuition fees incurred before March 28, 2013 that are carried forward to a subsequent year.

⁵ The amount will be indicated in the notice of assessment each year.

⁶ Generally, eligible tuition and training fees are the same as for the tuition tax credit, excluding fees paid to an establishment located outside Canada.

⁷ Including income from an office or employment, certain business income, the taxable part of scholarship income and research grants, the tax-exempt part of earnings of status Indians and emergency service volunteers, and maternity and parental benefits.

⁸ Indexed annually.

⁹ Including New Brunswick.

¹⁰ Possible under spouse transfer mechanism for non-refundable tax credits (see Section II).

¹¹ Also applies in Ontario and New Brunswick.