The most common deductions that apply to students are moving expenses and child care expenses.
You can deduct moving expenses if you move to attend courses as a full-time student or if you moved to start a new job, including summer employment, or to start a business. Your new home must be at least 40 kilometers closer to the new school or place of work than the previous home. Moving expenses can only be deducted against awards, employment or self-employment income.
Parents who are full-time students, or single parents who study full-time, can deduct child- care expenses on their tax returns. Part-time students may qualify for partial deductions.
Non-Refundable Tax Credits
The most common post-secondary non-refundable tax credits that apply to students are interest paid on student loans and the tuition, education and textbook amounts.
Interest on Student Loans
To be eligible for the credit, interest must, in fact, have been paid. The interest must be on a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or a law of the province, which governs the granting of financial assistance to students at the post-secondary level. Personal or family loans will not qualify. Credits that are not needed to offset income taxes are available for carry forward for up to five years.
You can only claim interest you have not previously claimed and you cannot claim interest that relates to a judgment obtained after you failed to pay back a student loan.
Education, Tuition and Textbook Tax Credit
You can claim the education credit for each whole or partial month in which you were enrolled in a qualifying education program. Part time students can qualify at reduced rates.
Disabled part-timers can receive the full credit.
In addition to obtaining a tax credit for tuition fees paid, this tax credit also covers mandatory fees such as student services, library and lab charges, athletics, computer services, exams, certificates and diplomas. Post-secondary students can claim a textbook tax credit of $65 per month for full-time and $20 per month for part-time studies.
The student has the option of also transferring this credit to a parent, spouse, common law partner or grandparent if it is not fully absorbed on his or her income tax return. But if the student carries them forward, the transferability will be lost. The amount of education, tuition and textbook tax credits that can be transferred is limited to a maximum amount of $5,000 (or $850 in tax credits) per year.