Students: How to get the most out of your 2021 return.
January 31, 2022
Whether you’re a full or part-time post-secondary student, you’re entitled to unique credits that can increase your refund or reduce the taxes you owe when you file your return. Claiming the tuition you paid, the interest you’ve paid on your student loans, and even your moving expenses can mean a better outcome for your tax year.
We know that doing your taxes can be complicated. That’s why our Tax Experts are trained to make sure you get all the credits you deserve.
Here’s what you need to know when you file your 2021 taxes.
Remember to claim your federal tuition tax credit.
The federal tuition tax credit is one of the top tax credits for post-secondary students. Even if you aren’t reporting any income this year, you can use this credit to claim the eligible tuition fees (over $100) you paid to take courses at your school. You can also claim fees you paid to an educational institution to take a course for developing or improving your skills in an occupation (if that institution is certified by Employment and Social Development Canada), as well as fees to take an occupational, trade, or professional exam, as long as you have the receipt.
Track down your T2202 certificate because you’ll need it to prove how much tuition you paid for the year. This form can be downloaded from your school’s web portal and is usually available at the end of February.
Note: The T2202 certificate replaced the T2202A and TL11B forms for the 2019 tax year and onwards.
If you don’t need the full amount this year, you can carry this credit forward to use in the future, or transfer it to a family member (a spouse, common-law partner, parent, or grandparent) to help them reduce their taxes.
Have you applied for the Canada training credit?
The Canada training credit, is available if you paid eligible tuition or other fees for post-secondary courses you took during the year. In order to claim this credit, you have to be between 25 and 65, and have a Canada training limit. Your Canada training limit is based on the income reported on your return. The training limit for most Canadians who are eligible for this credit is now $500 for 2021 which is up from its previous limit of $250 in 2021. You can find your Canada training limit on your 2020 Notice of Assessment.
The Canada training credit is refundable, which means if your credit is higher than the amount of tax you owe, you get to keep the rest as a refund. This is different from the non-refundable tuition tax credit, which only reduces the amount of tax you owe.
You can claim your tuition tax credit and Canada training credit in the same year, but keep in mind, the Canada training credit reduces the tuition tax credit you can claim, transfer, or carryforward.
Some federal and provincial credits were discontinued.
The Alberta, Ontario, and Saskatchewan tuition and education credits have been discontinued. If you’re a resident of any of these provinces and you have unused provincial tuition amounts (leftover amounts of the provincial tuition credit you didn’t use in a previous tax year), you’ll still be able to claim or carry them forward for use on future returns.
Likewise, the federal education and textbook amounts were eliminated. You can still claim unused amounts on your 2021 return to reduce your tax payable.
Keep in mind, carryforward amounts can’t be transferred to a family member and can only be claimed by the student.
Some provinces and territories still have their own credits for tuition fees.
If you’re eligible for the federal tuition tax credit, you might also be able to claim provincial tuition fees. This credit can still be claimed in the following provinces and territories:
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Prince Edward Island
Remember to claim the interest you paid on your student loans!
Did you know the interest you’ve paid on your student loans can reduce the amount of tax you owe? You can claim the interest you paid in 2021 (or any of the past 5 years, if you haven’t already claimed it) if your loan was issued to you under:
- The Canada Student Loans Act;
- The Canada Student Financial Assistance Act;
- Act respecting financial assistance for education expenses (residents of Québec);
- The Canada Apprentice Loan Act;
- A similar provincial or territorial government law; or
- A law of a province other than Québec governing the granting of financial assistance to post-secondary students (residents of Québec).
This means that interest paid on a personal loan or line of credit, a student loan that's been combined with another loan, or a student loan from another country won’t qualify for this credit.
If you don’t need to use the full credit this year, you can carry unused amounts forward for the next 5 years. Keep in mind, you can’t transfer these amounts to anyone else. Only you can claim the eligible interest amounts that you, or someone related to you, paid on your student loans.
Are you a student with a disability?
As a student with a disability, you might have some additional expenses that others don’t. To offset these costs, students with disabilities can claim some additional tax credits and deductions.
For example, if you need a page turner device or note-taking services to study, you might be able to claim these costs as a disability supports deduction on your federal and/or Québec return. Depending on the type of expense, the CRA (and Revenu Québec, if you’re a Québec resident) might ask for a prescription or a written certification from a medical practitioner. Additionally, for 2020 and 2021 returns, Employment Insurance (EI) and COVID-19 emergency benefits will be considered “earned income,” meaning even more Canadians might be entitled to claim this deduction.
You (or your parents, if you’re still their dependant) might also be able to claim the disability tax credit to reduce the taxes you owe.
Are you a student who is also a parent?
If you needed to pay someone to look after your child so you could attend class, you might be able to claim your childcare expenses on your federal and/or Québec return (if you’re a Québec resident). This includes the cost of daycares, babysitters, camps, and more! And like the disability supports deduction, EI and COVID-19 emergency benefits will be considered “earned income” in 2020 and 2021, so that more Canadians might be able to claim their expenses on their return.
Have you claimed your moving expenses?
If you moved more than 40 kilometres away from home to take courses in a post-secondary program in 2021, you might be able to claim your moving expenses. This includes what you paid for transportation, storage, travel, temporary living, and more. In order to qualify, you’ll need to be a full-time student who earned income related to your reason for moving (for example, if you received a taxable scholarship, research grant, or prize).
Save on taxes with the scholarship exemption.
As a student, scholarships, grants, and bursaries can provide some much-needed financial relief. This type of income is fully or partly tax-free, depending on whether you’re a full-time or part-time student.
If you were a full-time student at a post-secondary school between 2020 and 2021, any financial awards you received in 2021 will be tax-free as long as they aren’t significantly more than your living expenses (including costs like rent and groceries), tuition fees, and any other expenses you paid to be in your program. This is called the scholarship exemption.
If you were a part-time student between 2020 and 2021, your scholarship exemption is limited to $500 plus the amount you paid for tuition and the cost of materials you needed for your program. However, if you’re a part-time student with a disability, you have the same scholarship exemption as full-time students.
If you’re not a full or part-time student, your scholarship exemption is still $500. This applies to post-secondary programs that don’t lead to a degree, such as post-doctoral fellowships.
Keep in mind, research grants are taxable income, but you can deduct your expenses when you report this amount on your return (such as the cost of travel, lodging, and meals when you’re conducting research away from home).
Want to learn more about the new or unused credits and deductions you can claim on your 2021 return? At H&R Block, students file for less! Get expert help by finding an H&R Block office near you, or have one of our Tax Experts help you from home with Remote Tax Expert. Want to use our Do It Yourself Tax Software? You can Ask a Tax Expert any questions you have about your tax situation.