Tax tips for students

Many of your clients probably have kids in post-secondary education. More often than not, those students have little or no income.

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If they’ve neglected filing their income tax and benefit return, they could be missing out on several credits, deductions, and benefits. Here’s a list from the CRA:

Public transport: Students might be able to claim the cost of transit passes as a non- refundable tax credit.

Moving expenses: If a student moved for work purposes, including summer employment, they may be able to claim a deduction for moving expenses. Students may also be able to claim moving expenses if they move to take courses as a full-time student at the post-secondary level.

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Children: Even without an income, students with children may be able to claim a deduction for childcare expenses such as day camp payments, if they were incurred to allow the parent to earn income, go to school, or conduct research.

Full or part-time student: Students enrolled in a qualifying education program in 2011, may be able to claim the education amount of $400 for each eligible month if they were full-time, and $120 for each eligible month if studies were part-time.

Textbook costs: If you qualify for the education amount as a full-time student, you may also claim the textbook amount of $65 for each eligible month. If you qualify for the part time amount, you may claim the textbook amount of $20 for each eligible month.

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Tuition fees: Students may be able to claim a non-refundable tax credit based on the eligible tuition fees paid to attend an educational institution. The student must have paid more than $100 in eligible fees.

Student loan interest: The upside of student debt is that the borrower may be able to claim a non-refundable tax credit based on the interest paid on a student loan in 2011. They may also claim interest paid for the preceding five years if it has not already been claimed.

Note: Only interest paid for loans received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial legislation for post-secondary education may be claimed.

GST/HST credit: A quarterly payment that helps individuals and families with low or modest incomes to offset all or part of the GST/HST they pay. Complete the application area on page 1 of your 2011 income tax every year.

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Transferring and carrying forward amounts: You must first claim your tuition, education, and textbook amounts on your current return and apply the amount needed to reduce your 2011 federal tax payable to zero.

Afterwards, you can either transfer the unused amount to an eligible individual or claim it in a future year to reduce the amount of federal tax payable. You have to show these eligible amounts exist every year in order to enable the CRA to keep track of your unused tuition, education, and textbook amounts available for carry-forward to other years.

Non-refundable tax credits: These credits can reduce a federal income tax bill. If the total of non-refundable tax credits is more than federal income tax, the filer will not receive a refund for the difference.