The Federal Student Loan is one of the most significant means of reducing the tax burden for students in Canada. This loan provides 15% of the amount of eligible tuition expenses paid during the year. To be eligible for this loan, your tuition expenses must exceed $100 per educational institution.
The education loan is calculated by multiplying the total eligible education expenses by 15%. For example, if a student paid $5,000 for tuition, they could receive a loan of $750 ($5,000 × 15% = $750). If you do not have enough income to use the entire education loan in the current year, you can carry over the unused amount to future years or transfer up to $5,000 to a qualified family member.
Qualified educational expenses include entrance fees, library or laboratory fees, tuition waivers, examination fees, application fees, verification fees, certificate, diploma, or degree fees, membership dues, and seminar fees, as well as mandatory computer service fees.
Basic Personal Amount
The Basic Personal Amount (BPA) is a non-refundable tax credit available to all Canadians. For 2024, the federal PIPE is $15,705 and will increase to $16,129 in 2025. This means that students with income at or below this amount will not pay any federal tax.
For students with higher incomes, the CLB provides a partial tax reduction. The federal tax credit is calculated by multiplying the CLB by the lowest federal tax rate (15% for 2024 and 14.5% for 2025). For example, a student with an income of $50,000 in 2025 will receive a federal tax credit of approximately $2,338 (16,129 × 14.5%).
Canada Training Credit
The Canadian Training Credit (CTC) is a refundable tax credit available to individuals between the ages of 26 and 65 who pay eligible training expenses. This credit allows applicants to accumulate up to $250 annually, up to a maximum lifetime limit of $5,000.
To be eligible for the CCT in 2024, you must meet the following conditions: be a resident of Canada for the entire year, be between the ages of 26 and 65 at the end of the year, have a Canadian Training Credit limit greater than zero, and pay eligible training expenses. The amount you can receive is equal to the lesser of half of your eligible education expenses or your CLT limit for the year.
Interest credit on student loans
Students can get a non-refundable tax credit for interest paid on government student loans. The federal credit is 15% of the interest paid, and you can use interest paid in the current year and any of the previous five years if it hasn't been claimed before.
This credit applies only to loans made under the Canada Student Loans Act, the Canada Student Financial Assistance Act, or similar provincial or territorial legislation. Interest paid on personal loans, lines of credit, or student loans from other countries does not qualify.
GST/HST Credit
The GST/HST Credit is a tax-free quarterly payment designed to help low- and moderate-income Canadians offset the federal sales tax. Students may be eligible for this credit if they are residents of Canada and meet one of the following conditions: they are 19 years of age or older, they have (or had) a spouse or partner, or they are (or were) a parent.
The maximum payment amounts for the period July 2024 to June 2025 are: $519 for single individuals, $680 for married couples or those in common-law relationships, and $179 for each child under the age of 19. To receive the credit, students must file a tax return each year, even if they had no income.
Provincial tax programs in Alberta
Elimination of provincial education credits
It is important to note that Alberta has discontinued provincial education credits for the 2020 tax year. This change was part of the Alberta government's budget cuts to post-secondary education. However, students can still use provincial education credits accumulated up to and including 2019 to reduce their provincial taxes in future years.
Provincial education credits carried forward from previous years are applied at a rate of 10% and can be used to reduce Alberta provincial taxes when the student has sufficient taxable income.
Alternative forms of support
Although provincial education credits are no longer available, students in Alberta still have access to other forms of financial support through Alberta's student assistance program, including grants and loans. The government also temporarily froze interest rates on student loans during the pandemic, although this measure is no longer in effect.
Other tax credits and deductions
Child care expenses
Students who are parents may be eligible for a deduction for child care expenses. The maximum amounts that can be claimed are: up to $8,000 for each child under age 7, up to $5,000 for each child between ages 7 and 16, and up to $11,000 for each child who qualifies for a disability credit.
The deduction must be claimed by the spouse or partner with the lower income, except in certain circumstances. Qualified expenses include payments to babysitters, daycare centers, educational institutions for childcare services, day camps, and boarding schools.
Moving expenses
Students may be eligible for a deduction for moving expenses if they move at least 40 kilometers to attend a postsecondary institution on a full-time basis. These expenses can only be deducted from taxable scholarships, bursaries, and research grants that are included in income.
Eligible relocation expenses include transportation and storage costs, travel expenses to the new place of residence, temporary living expenses (maximum 15 days), costs of terminating a lease, and related expenses. If a student also moves for work, they may deduct moving expenses from employment income received at the new place of employment.
Free tax assistance services in Calgary
University of Calgary Volunteer Tax Assistance Program
The University of Calgary Student Union offers a free tax assistance program run by professional student volunteers trained to Canadian Revenue Agency standards. This service is available to all University of Calgary students, staff, and faculty with a valid student ID.
The program runs from February to April each year, offering both appointment-based and walk-in days. Eligibility requirements include: unmarried individuals with an income below $35,000, single parents with one child and an income below $45,000, or married couples with an income below $45,000.
Other free tax clinics
Several other educational institutions in Calgary also offer free tax clinics. SAMRU (Mount Royal University Students' Association) runs a free tax clinic from March to the end of April. The Bow Valley College Student Association also offers free tax assistance services for eligible students.
These clinics typically serve individuals with simple tax situations and incomes below certain thresholds. They are part of the Community Volunteer Income Tax Assistance Program (CVITP), an initiative of the Canada Revenue Agency.
Strategies for maximizing tax benefits
Importance of filing a tax return
Even if students have no income, they are still encouraged to file a tax return. This allows them to accumulate non-refundable credits for the future, be eligible for the GST/HST credit and other benefits, and establish a filing history that may be useful for future student aid applications.
Transferring and passing on credits
Students should understand the options for transferring unclaimed credits to future years or passing them on to eligible family members. Federal education credits can be carried over indefinitely, while the maximum amount that can be passed on is $5,000 per year.
Combining multiple loans
Students may apply for multiple loans at the same time. For example, they can combine a federal student loan with a Canada Training Loan (for those over 26), a student loan interest subsidy, and a GST/HST loan. However, it is important to note that the Canada Training Loan reduces the amount of student loan that can be claimed, transferred, or carried forward.
Record keeping
Students should keep all necessary documents, including T2202 certificates from their educational institutions, student loan interest receipts, and documentation of child care or moving expenses. These documents are necessary to claim various credits and deductions.
Tax benefits for students in Calgary are primarily provided through the federal tax system, as Alberta has discontinued its provincial education credits. However, available federal programs, including education credits, basic personal amount, Canada Training Credit, and GST/HST Credit, can provide significant tax support. Free tax assistance services available at local educational institutions provide valuable support to students in navigating this complex system and maximizing their tax benefits.