If you are in school, you get a tax break in the form of tuition credits. And if you can’t use these credits, you can transfer them to your spouse, your parents or your grandparents.
Step 1: Get a Form T2202 from your college or university.
Step 2: The information from this form must be entered into a schedule 11 on your tax return in order to claim the credits. You will be able to claim both a tuition amount, and a monthly allowance for books, as detailed on the form. (Contact me if you have any questions.)
Step 3: If you can not use the credit (because your income is too low) you can either keep the credit for future years, or transfer it to a spouse, or transfer it to a parent or grandparent up to $5,000. To transfer the credit you must sign the back of your form T2202.
NB. The student is the one who fills out the schedule 11. If you are the person receiving the transfer you do not submit a schedule 11. The only supporting documentation you need is the signed T2202, and make sure you keep this documentation in case CRA requests it.
“Kids. Exactly when do they stop being your dependent?” – mother of a 20 year old still living at home
In this economy, many young people continue to live at home while in university, or receive financial assistance from their parents past age 18. Sadly, for tax purposes, after the end of the year they turn 18, they can no longer be claimed as a dependent on your taxes unless they are disabled or infirm.
Turning 18- In the year your child turns 18, (unless they are disabled or infirm ) they are a dependent until Dec. 31 of that year. On Jan. 1, as far as CRA is concerned, they are on their own.
Disabled or infirm-If your child is older than 18 and needs ongoing support for medical reasons, you will need to provide a letter from a doctor in order to claim your child as a dependent.
Young earners (under 18)- A single parent who claims the amount for an eligible dependent must deduct the child’s income from the amount that can be claimed.
Attending University – Over 18 years, you can not claim your child as a dependent, but you can claim up to $5000 in tuition credits. See my post on tuition credits for more information.