Studies show that 49% of the students owe some type of debt and the average debt owed by a student is a surprising fact, which is $24,000 at the time of graduation. Whether or not you owe the debt, one thing is certain, if you are studying in Canada, you are eligible to claim tuition credits for the eligible tuition fees paid to the educational institution during the year.

How do you get the tuition credits?

Generally, your educational institution issues a tax certificate, such as T2202, TL11A, or TL11C, which has the information about the tuition fee paid, you would have to present this certificate to your accountant at the time of tax filing so that your tuition credits can be added to your profile to use in the current year or in future years, as they can be carry forwarded if not used in the current year.

What type of credits are tuition credits and do they work?

Tuition credits are non-refundable tax credits, in simple words to claim tuition you must have taxes payable or have paid, and these credits reduce your tax bill.

For example, if you have $12,000 tuition credits, to get the dollar amount of these credits, multiply it by 15% which is the lowest federal tax bracket, and you get 12,000*15% = $1,800. Let’s assume you have paid $3,000 in federal taxes, as you have $1,800 worth of tuition credits, then you will be entitled to claim $1,800 as a refund.

or if you owe $3,000, then your $1,800 tuition credits will reduce your tax bill, and you will only have to pay $1,200.

This was the simplest example, but aside from the federal tuition credits, there are provincial and territorial tuition credits as well. Alberta, Ontario, and Saskatchewan are the provinces that have discontinued the tuition credits, other than these all the other provinces and territories let you claim the tuition credits as per their applicable rates.