Home > News & Features > Tax Facts & Planning: Transferring Schools Costs To Supporters

Transferring Schools Costs To Supporters

By Evelyn Jacks

Let's face it. . .we all appreciated the support we got from family when we were struggling students. Under the Income Tax Act, those kind family sacrifices can bring financial rewards.

This works if the student does not have sufficient income to use the tuition, education, and textbook amounts earned in the current year. In that case, a portion of the unused amounts may be transferred to a cohabiting spouse or common-law partner.

If the taxpayer does not have a spouse or common-law partner or the person's spouse or common-law partner is not claiming the taxpayer as a dependant, then the unused amount may be transferred to the taxpayer's parent or grandparent or to the spouse's parent or grandparent.

The maximum amount that may be transferred is the lesser of

  • the unused tuition, education and textbook amount for the year
  • $5,000 minus the student's claim for the tuition, education, and textbook amounts earned in the current year.
Any amount not claimed by the student in the year and not transferred to a supporting individual may be carried forward to future years. The amount carried forward must be used as soon as possible and claimed before any current year tuition, education and textbook amount. The carried forward amount may not be transferred, but must be used by the student.

Provincial credits. You should also know that the tuition, education, and textbook amounts at the provincial level may not correspond to the federal amounts, so a separate provincial Schedule 11 may be required when you file your tax return. In addition, the unused tuition, education, and textbook amounts carried forward may be different at the federal and provincial level.

Correcting Errors and Omissions. If you made mistakes claiming your entitlements or missed them entirely, know that you can adjust federal returns for a period of 10 years in the past. Provincial adjustments can generally be made for a period of only three years. Check out the tax advantages of going to school with your tax and financial advisors.

It can make a big difference to cash strapped students and their families. Happy studying!


Image of Essential Tax Facts book cover - click to order Spacer

Sure, it's difficult to be an expert at filing your income tax return – something you do only once a year – but once again Canada's most trusted tax author, Evelyn Jacks has come to the rescue with over 200 quick and easy Essential Tax Facts you need to know to get the job done and to your best advantage in 2011 and beyond. Click here to order the book.



Knowledge Bureau Disclaimer: ©2010 Knowledge Bureau Inc. All rights reserved. No part of this publication may be reproduced, transmitted or otherwise used in any form or manner or stored in any database or retrieval system without prior written permission of the publisher. This article is written to be of a general nature.   Readers of this work are responsible for their own actions and outcomes. The author and publishers are not in the business of providing advice, or registered and licensed to sell any investment products, nor does the author have any compensatory relationship, or beneficial ownership regarding the sale of any investment products; therefore any and all liability to any person in respect of anything and any consequence as a result of the contents of this work is expressly disclaimed.