Tuition Tax Credit
What is the tuition tax credit?
The tuition fees you pay during medical school or your residency program are not deductible, but may be eligible for a tax credit known as the tuition tax credit.
What conditions must be met with the tuition tax credit?
The conditions include:
- attending a post-secondary institution in Canada
- paying more than $100 in total tuition for the year. The tuition must also have not been paid on your behalf or reimbursed. As well, an amount equivalent to your tuition fees cannot have been included as part of your parent’s income.
Your university will provide you with a tax form called the T2202A which will let you know what you have paid in tuition.
What other fees can qualify for the tuition tax credit?
Other qualifying fees could include:
- application (except CaRMS application registration fees)
- use of library or laboratory facilities
- examinations (including re-reading)
- mandatory computer service fees
- certain academic fees
- advanced trauma life support (ATLS) courses
If there are any leftover credits, can they be transferred to somebody else?
If you do not need your entire tuition credit to reduce your tax to zero, the remaining credit can be transferred to an eligible person, such as a spouse, common-law partner or parent.
The maximum amount of tuition that can be transferred is $5,000, which would work out to a federal tax credit of $750.
How do I transfer my tuition?
To do this, you will need to complete tax form T2202A by signing and dating the back. The person you are giving the credits to should keep a copy of the signed form. The form does not need to be filed with the return but must be available if requested by Canada Revenue Agency (CRA).
Can I carry forward any unused tuition?
Yes, you can carry forward unused tuition indefinitely. Any amount not used in the current year and not transferred to an eligible person will get carried forward.
However, once you are earning sufficient income to use the unused credits, they must be applied to reduce taxes payable.
Part of the process of becoming a doctor involves taking different exams. The expenses incurred for these may qualify for a tax credit.
Here is a list of some of the common exams and whether you will be able to receive a tax credit for the fees you pay for the exams:
- United States Medical Licensing Exam: these exam fees are not eligible for the tuition tax credit.
- FRCPC (Fellow of the Royal College of Physicians of Canada): the exam fees and certain additional fees are eligible for the tuition tax credit and receipts will be issued to those paying fees.
- FRCSC (Fellow of the Royal College of Surgeons of Canada): the exam fees and certain additional fees are eligible for the tuition tax credit and receipts will be issued to those paying fees.
- CCFP (Certification in the College of Family Physicians): the exam fees and certain additional fees are eligible for the tuition tax credit.
You may also be interested in finding out more about the tuition tax credit.
Interest on Student Loans
All students may claim a 15% tax credit on payments of the interest portion of their loans that are with the Canada Student Loans or provincial student loans programs, such as a loan through the Nova Scotia Student Loan program.
Can I get the tax credit on interest paid on bank loans or lines of credit?
What supporting documentation do I need to claim interest on student loans?
Early in the year, the financial institution handling your loan(s) will mail you a statement of the actual interest paid on the loan(s) for the previous year. On Line 319 of Schedule 1 of your tax return, you will fill in this amount. Be sure to attach this statement or receipt to your tax return.
Is there a limit or maximum to the amount of interest I can claim for the credit?
Can I transfer unused interest tax credits to somebody else?
Unused interest tax credits may not be transferred to a spouse, common-law partner or parent. However, you can carry forward unused interest tax credits for up to five years.