Leave a commentIf you do not have enough income to utilize your total tuition costs, education amount or textbooks amount, you can either carry forward these amounts to future years (no limit to carry-forward period), or you can transfer the costs to your spouse, common law partner, or to a parent or grandparent of you or your spouse or common law partner. The maximum amount that can be transferred to a spouse, parent or grandparent is $5,000, less the costs claimed by the student. This may still result in costs remaining that can be carried forward. The transfer of costs to another person should not be more than can be utilized on their tax return. Then any excess costs can still be carried forward.
Once unused costs have been carried forward, they cannot be transferred to anyone in a future year. In future years, the carried forward amounts are claimed by completing both the federal Schedule 11 of the tax return, and the provincial S(11) schedule. Carried forward amounts must be claimed in the first year that tax is payable. Only the amounts required to reduce taxes to zero would be claimed, and any remainder would again be carried forward.
There is a Federal tax credit as well as a provincial or territorial tax credit for tuition, education and textbook amounts. For this reason, to claim these amounts, or to transfer them to another person, you must complete both the Federal Schedule 11 of your tax return, and the provincial S(11) schedule. You must also designate the individual, and specify the federal and provincial amounts that you are transferring to them, on your Form T2202, T2202A, TL11A, TL11B, or TL11C. Québec uses Schedule T for tuition or examination fees being claimed or carried forward. The unused amounts carried forward on the federal Schedule 11 will often be different from the unused amounts carried forward on the provincial S(11) schedule. When claiming the carried forward amounts in the following year, make sure you use the federal amounts when completing your Federal Schedule 11, and the provincial amounts when completing your provincial S(11) schedule. The federal and provincial (except Québec) forms are available on the Canada Revenue Agency (CRA) website.
Amounts cannot be transferred to both a parent or grandparent and to a spouse. If part of the tuition, education and textbook amounts are transferred to a parent or grandparent, they will claim this on line 324 of their tax return. Amounts transferred to a spouse will be included on your Schedule 2, and their Schedule 2, and they will claim this amount on line 326 of their tax return.