Claiming non-refundable tax credits - Segment 6
Host: Welcome to the segment called Claiming non-refundable tax credits, part of the Canadian Students and Income Tax video.
With me is Sandra Moore.
Subject matter expert: Thank you Janice.
Host: What exactly are non-refundable tax credits?
Subject matter expert: Non-refundable tax credits reduce your federal tax, but do not generate a refund, so even if the total of your non-refundable tax credits is more than your federal tax, you will not receive a refund. This is why they're called "non-refundable".
Host: Are there both federal and provincial tax credits?
Subject matter expert: Yes there are. Federal non-refundable tax credits are calculated on Schedule 1 of the T1 general income tax and benefit return. You may also be entitled to provincial or territorial credits in addition to your federal credits. Each province and territory has its own forms for claiming credits.
All provincial and territorial forms are available on the CRA website. The link is included in the Related links for this segment.
Host: What are some common non-refundable tax credits that apply to students?
Subject matter expert: Common federal non-refundable tax credits that apply to students are:
- the basic personal amount;
- amount for children 18 years of age and under;
- public transit amount;
- children’s fitness amount;
- children’s arts amount;
- interest paid on student loans;
- tuition, education, and textbook amounts; and
- the Canada employment amount.
For a full list of non-refundable tax credits, go to the CRA webpage on that topic. The link is included in the Related links for this segment.
Host: Let's start with the first one you mentioned, the basic personal amount.
Subject matter expert: The basic personal amount is a tax credit available to anyone who is subject to income tax during the tax year. With this tax credit any income you earned up to the amount of the credit is not taxed.
Host: That seems easy enough. What about the public transit amount?
Subject matter expert: You can claim the cost of monthly public transit passes or passes of longer duration such as as annual passes for travel within Canada on public transit during the year. These passes must permit unlimited travel on local buses, streetcars, subways, commuter trains or buses, and local ferries.
You can also claim the cost of shorter duration passes if each pass entitles you to unlimited travel for an uninterrupted period of at least 5 days, and you purchase enough of these passes so that you are entitled to unlimited travel for at least 20 days in any 28 day period.
You can also claim electronic payment cards if you use the card to make at least 32 one-way trips during an uninterrupted period of up to 31 days, and the card is issued by a public transit authority that records and provides a receipt for purchase and use of the card.
Note that ride or trip passes are not eligible for this credit because they don't allow unlimited travel.
Host: My children have monthly transit passes to attend school. Can I claim their transit passes as well?
Subject matter expert: Yes, you can. You can include claims for your children, or the children of your spouse or common-law partner, as long as they are less than 19 years old as of December 31.
Host: Do I attach my used passes or receipts when I file my return?
Subject matter expert: No Janice, but you have to keep your receipts for six years in case the CRA asks for them.
For more information on public transit amounts, go to www.cra.gc.ca/transitpass. The link is included in the Related links for this segment.
Host: You said interest on student loans is another common deduction, Sandra. Can I claim the interest paid on my student loan as a credit?
Subject matter expert: Yes, you may be able to claim an amount for the interest paid on your student loan if you received it under: the Canada Student Loans Act, the Canada Student Financial Assistance Act; or a similar provincial or territorial government law for post-secondary education. You can claim an amount for interest you have not previously claimed.
It's important to note that a student line of credit from a bank does not qualify for this credit.
Host: What happens if I have a student loan but my parents or someone else pays my loan payments? Should they be claiming the credit?
Subject matter expert: No, interest paid on your student loan can only be claimed by you regardless of whether it was you or someone else who actually paid on the loan. You cannot transfer this amount to another person.
Host: What if I have no tax payable for the year? Do I lose the opportunity to claim this credit?
Subject matter expert: No. If you have no tax payable for the year that the interest is paid in, it is to your advantage not to claim it on your tax return for that year. You can carry the interest forward and apply it on your return for any of the next five years.
Host: Do I attach my receipts for this credit to my return when I file?
Subject matter expert: If you are filing a paper return you must attach your receipts. If you are filing electronically, you should keep your receipts in case the CRA asks for them.
Host: How long should I keep my receipts?
Subject matter expert: Keep all your receipts for at least six years.
Host: What is the Canada employment amount Sandra?
Subject matter expert: If you were an employee in the tax year, you are eligible to claim an employment amount on line 363 of your Schedule 1. You claim either the employment amount or the total of the employment income you reported on lines 101 and 104 of your return, whichever is less.
Host: Thank you Sandra.
This concludes the segment called Claiming non-refundable tax credits. part of the CRA's Canadian Students and Income Tax video.
Thank you for watching.
Report a problem or mistake on this page
- Date modified: