Institute Of Chartered Accountants Of Ontario

Institute Of Chartered Accountants Of Ontario

September 28, 2009 08:45 ET

Ontario's Chartered Accountants Offer Tax Tips for Students

CAs' advice designed to help students save money, make money

TORONTO, ONTARIO--(Marketwire - Sept. 28, 2009) - Students might be surprised to learn that planning for school also means that they should be thinking about next year's tax-filing deadline. According to the Institute of Chartered Accountants of Ontario, there are taxation-related steps a student can take to minimize the costs of university. Here are some tax tips from CAs to help students save or even earn money on their taxes.

- Scholarship income - Scholarship, fellowship or bursary income
received by a taxpayer in a taxation year with respect to
elementary, secondary, post-secondary education or occupational
training is not included in income and is, therefore, exempt from

- Tuition, education and textbook credits - The federal government
allows a non-refundable tax credit to assist with the cost of
textbooks for post-secondary students. The textbook tax credit is
calculated based on $65 for each month the student qualifies for the
full-time education tax credit and $20 for each month the student
qualifies for the part-time education tax credit. In addition, both
Ontario and the federal government allow a post-secondary education
credit and a credit for tuition expenses.

- Reduce a supporting person's taxes - The education, tuition fee and
federal textbook credits arising during the year can be transferred
by a student to a supporting person such as a spouse, parent or
grandparent (up to certain limits), which allows them to claim the
credit and reduce their taxes.

- Unused tax credits - If students have any education, tuition fee or
federal textbook credits that aren't claimed or transferred, they
can carry them forward to reduce their taxes in the future when
their income is higher. They have five years to claim tax credits
for student loan interest, but they can carry forward and claim
education, federal textbook and tuition fee credits indefinitely.

- Tax refunds - Depending on a student's earnings from summer or part-
time jobs, they may qualify for tax refunds, especially if they
apply and qualify for GST rebates, tuition credits, education and
federal textbook credits or the student loan interest credit.

- RRSP contribution room - Even if students are not expecting a tax
refund, if the student has earned income, filing a return could
provide some welcome tax relief in the future. Students with earned
income should always file a tax return because it will generate
Registered Retirement Savings Plan (RRSP) contribution room.

- Moving expenses - Students who move at least 40 kilometres to attend
full-time post-secondary school may claim costs associated with
moving. Whether studying in Canada or outside the country, students
can deduct moving expenses, but only against income from
scholarships, fellowships, bursaries and research or similar grants
(that isn't exempt) or from part-time jobs they hold while going to
school. In some cases, this can increase the credit amount that can
be transferred to a supporting person. The biggest benefit comes
in the year the student leaves school and begins their new job as
the moving costs can be deducted against their new employment
income. Moving expenses can also be deducted if a student moves from
school to home or another location to work at, for example, a summer

- Transit expenses - The federal government offers a non-refundable
tax credit to help pay the cost of public transit passes that are of
monthly or longer duration. Payments for electronic payment cards
and weekly passes where an individual purchases passes for four
consecutive weeks (provided certain conditions are satisfied in each
case) are also eligible. Students need to remember to keep receipts
so that a credit can be claimed. If the students are under 19 at the
end of the year, their parents can claim the credit.

- Ontario property tax credit - For students renting accommodation
while at school, Ontario provides a refundable tax credit for
qualifying individuals based on their occupancy costs in Ontario.
Occupancy costs would be based on the rent the student pays (or that
someone else pays on their behalf) in Ontario. Students living in
residence can claim $25 for their occupancy cost.

As always, individual circumstances will dictate whether these or other tax strategies best apply and conditions must be met in some cases. The Institute recommends contacting a Chartered Accountant for specific tax advice.

About the Institute of Chartered Accountants of Ontario:

The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario's 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession's internationally recognized standards of qualification and the enforcement of its rules of professional conduct. Ontario CAs contribute greatly to international and domestic investor confidence in the soundness of the Ontario and Canadian economies. The Institute's website is: and the student website is

Contact Information

  • The Institute of Chartered Accountants of Ontario
    Perry Jensen
    416-969-4271 or 1-800-387-0735 ext. 271