Back-to-school season not only means a lot of expenses, but also potential education tax credits depending on the situation. We often receive questions about what families can and cannot claim – and the answers sometimes surprise parents.
Most students fall into one of these categories:
Public school: Unfortunately, fees for supplies, field trips or extracurricular activities (eg. band, sports teams) at school aren’t tax deductible.
Private school: Parents whose children attend a private school cannot deduct the tuition from their taxes. However, where religious organizations run the school, they may offer a charitable donation receipt (not necessarily equivalent to the full tuition amount). Use that donation on your personal income tax return. The usual formula for working out the tax deduction is 15% of total donations under $200, and 29% of the portion over $200.
Post-secondary school: Tuition fees paid to most colleges and universities in Canada and the United States are tax deductible. To claim this, you need a tuition receipt known as the T2202A form – or equivalent from the U.S. The tax return automatically generates a credit for textbooks, so you don’t need to save the receipts or claim a specific number. In some cases, parents will claim the tax benefit when paying their children’s tuition, and others may give it to the student to carry forward as a credit to claim once they have income tax payable.
Look out for changes in tax credits
For 2017, some previous tax credits have been eliminated, including those for bus passes, and children’s fitness and arts activities.
You may also claim other education-related tax credits — be sure to discuss them first with a tax professional, like Canwest Accounting.
In some cases, you may claim courses as a business expense under professional development. That might include an online sales-pitch tutorial for someone who a self-employed and selling a product or service. Additionally, most professions require continuing education, to keep their members’ skills current. If the employer doesn’t reimburse for this, it may be appropriate for the employee to claim it under training expenses – but they must have a copy of the receipt.
Official tax receipts usually become available in January or February – and you can often download them from the web. When in doubt, always ask an accounting professional.
The suggestions and advice provided by Canwest Accounting should not be relied upon in place of professional advice. You are responsible for checking the accuracy of relevant facts and opinions provided.