Post-secondary students have access to some of the most generous tax credits. Their T2202A Form allows full-time and part-time students to claim their tuition as well as the education and textbook amounts.
However, all of these credits are non-refundable, which means they cannot create a refund by themselves. In order to receive a tax refund, you need to have paid income tax during the year. But many students have not earned enough money to pay taxes, so they cannot claim their tuition and other credits.
Students can choose to transfer credits to a parent, grandparent or spouse. Or they can decide to carry forward the credits until they have taxable income and claim the credits then. Any carry-forward amounts will be noted on your Notice of Assessment until they are used.
Unfortunately, you do not get to choose when you can use your carry-forward amounts. If you can use all your credits in a particular tax year, you are required to do so. You cannot spread them out over a number of years or wait to claim them.
You are also allowed to carry forward moving expenses if you cannot claim all your receipts in the tax year. Moving expenses can only be claimed against employment income in your new location, so if you moved later in the year you may not have enough taxable income in your new job to deduct all your costs. Because of this, you are also allowed to carry forward the unused amount to the immediately following year.
Other credits do not allow you to carry forward amounts for future years. The Children’s Fitness Credit, Children’s Arts Credit and the Transit Pass Credit all need to be claimed in the year they are incurred. If you do not have enough taxable income to take advantage of these credits, you lose them. However, you are allowed to claim up to six years’ worth of charitable donation receipts in one year to maximize your savings.
If you forget to apply your tuition/education carry forward amounts, the CRA will automatically claim them for you. The credits available are part of the information on My Account or are on your Notice of Assessment. But because carry-forward credits can lead to some valuable tax savings, you really should ensure you know the amount you have available – and use all the credits.