Students in Canada have a lot to think about when it comes to taxes. There are a number of tax breaks and deductions available, but it can be tricky to figure out what is available and how to claim it. In this post, we will discuss the most important tax considerations for students in Canada. We will cover topics such as tuition deduction, student loan interest deduction, and more!
Tuition Deduction
Tuition Deduction: Students in Canada can deduct the cost of tuition fees paid to a university, college, or other educational institution. To be eligible for this deduction, the student must be enrolled in an eligible program and have paid at least $100 in tuition fees. The maximum amount that can be deducted is $400 per month.
Student Loan Interest Deduction
Student Loan Interest Deduction: Student loans are subject to interest when taken out. Fortunately, students can deduct any interest repaid on their loan up to a certain limit. This deduction is available for both federal and provincial student loans (but not private loans). For the 2020 tax year, the maximum amount of deductible interest is $2,000.
Transferring Credits
Transferring Credits: If you are transferring credits from one institution to another, you may be eligible for the transfer credit amount. This allows students to claim up to $5,000 in tuition and education amounts transferred from one educational institution to another.
Receiving Scholarships
Receiving Scholarships: Receiving a scholarship or bursary can be beneficial for both your finances and academic career, but it is important to note that these amounts are taxable. If you receive more than $500 in scholarship money in a year, you will have to report this income on your tax return.
Live-in Caregiver Program
Live-in Caregiver Program: The Live-in Caregiver Program (LCP) is available for international students who work as caregivers in Canada. This program allows foreign caregivers who have completed a live-in caregiver program in Canada to claim up to $3,000 in tuition fees.
These are some of the tax considerations for students in Canada that you should be aware of. It is important to research any deductions or credits available to make sure you get the most out of your taxes. Additionally, speaking with an expert can help ensure that all eligible deductions are claimed and everything is reported correctly. With the right knowledge and preparation, filing taxes as a student can be much easier!
