Post-secondary education is costly, but your kids can give you a tax break

Post-secondary education costs are rising. Statistics Canada estimated that 90 per cent of students faced an increase in tuition last year, to an average of just less than $5,200. Over three or four years, the costs can add up for both parents and students.

But students do receive a number of tax credits and benefits, and some of these can be passed to their parents.

“No matter who pays the tuition, the university or college issues a T2202A to the student that indicates the tax credits they can claim,” says Cleo Hamel, senior tax analyst with H&R Block Canada (hrblock.ca). “Students must use their credits first and then they can choose to transfer up to $5,000 to a parent, grandparent or spouse.”

If students cannot use all their tuition and education credits, they can carry forward the amount for future years. This can result in a sizable tax refund once they begin their careers.

“The decision to transfer credits is entirely up to the student,” explains Hamel (1-800-HRBLOCK). “If parents do not have a signed T2202A, they cannot make the claim.”

Even if they earn little to no income, students should file their own return to take advantage of tax credits and benefits. And once they turn 19, they may be eligible to receive the quarterly GST/HST payment.