The cost of post-secondary education in Canada can be quite expensive. However, the Canadian government offers several tax benefits and credits to help offset these costs. One of the most significant benefits is the tuition tax credit, which allows students to claim a portion of their tuition fees paid as a tax credit. This credit can be claimed by either the student or their supporting individual.
One important aspect of this credit is the maximum tuition amount that can be claimed. In this blog post, we will cover everything you need to know about the maximum tuition amount, including how it is calculated and who is eligible to claim it.
What is the Maximum Tuition Amount?
The maximum tuition amount is the maximum amount of eligible tuition fees that a student or their supporting individual can claim as a tax credit. It is important to note that not all tuition fees are eligible for the credit. Only tuition fees paid to institutions that are recognized by the Canada Revenue Agency (CRA) are eligible.
How is the Maximum Tuition Amount Calculated?
The maximum tuition amount is calculated as the lesser of the following amounts:
- The total eligible tuition fees paid; or
- The maximum claim amount for the year.
The maximum claim amount is indexed to inflation and is set annually by the federal government. For the 2021 tax year, the maximum claim amount is $10,000.
Who is Eligible to Claim the Maximum Tuition Amount?
Both students and their supporting individuals can claim the maximum tuition amount. A supporting individual can be a student’s spouse or common-law partner, or a parent or grandparent of the student or their spouse/common-law partner.
It is important to note that the maximum tuition amount can only be claimed once. This means that if a student and their supporting individual both paid eligible tuition fees, they must decide who will claim the maximum tuition amount.
Conclusion
In conclusion, the maximum tuition amount is an important aspect of the tuition tax credit. It is calculated as the lesser of the total eligible tuition fees paid or the maximum claim amount for the year, which is set annually by the federal government. Both students and their supporting individuals are eligible to claim the maximum tuition amount, but it can only be claimed once. By understanding the maximum tuition amount and how it is calculated, students and their supporting individuals can maximize their tax benefits and credits and reduce the cost of post-secondary education in Canada.