Student Tax Return Canada 2026: Tuition Credits, T2202, Moving Expenses, and When Parents Can Claim

– ITA s.118.5, s.118.8, s.62 | CRA Guide T4040 | Schedule 11

University changes your schedule.
It should not derail your tax position.

For students — and their parents — the tax return is not just compliance.
It determines:

• Tuition credit carryforwards
• Transfers to parents or spouses
• Moving expense deductions
• Future RRSP room
• Benefit eligibility

Let us break this down properly under the Income Tax Act.

 

1. The Tuition Tax Credit: How It Actually Works (ITA s.118.5)

Under ITA s.118.5, eligible students may claim a non-refundable tax credit for qualifying tuition paid to a designated educational institution.

Important principles:

• It is a non-refundable credit
• It reduces federal tax payable
• It does not generate a refund by itself

If you have no tax payable:

The credit may be carried forward or transferred (within limits).

 

What Counts as Eligible Tuition?

Tuition must:

• Be paid to a qualifying institution
• Be supported by Form T2202
• Meet minimum duration requirements (generally 3 consecutive weeks for post-secondary programs)

The T2202 slip is issued by the institution — not the student.

 

2. What Is Schedule 11?

Schedule 11 is used to:

• Calculate current-year tuition amounts
• Determine transfer amounts
• Track carryforward balances

Failure to properly complete Schedule 11 results in lost carryforward tracking.

This affects future tax years.

 

3. Carryforward: The Long-Term Asset Students Ignore

If you cannot use your tuition credit because:

• Your income is low
• Your tax payable is zero

The unused amount carries forward indefinitely.

There is no expiry.

This can become valuable later when:

• You earn higher employment income
• You move into higher tax brackets

Tuition credits are a deferred tax asset.

Treat them as such.

 

4. Transfers to Parents or Spouse (ITA s.118.8)

Under ITA s.118.8, a student may transfer up to a prescribed annual maximum of current-year tuition to:

• A parent
• A grandparent
• A spouse or common-law partner

Important:

• Only current-year amounts are transferable
• Carried-forward balances cannot be transferred
• The student must designate the transfer on Schedule 11

Who should claim it?

Generally:

• If the student has little or no tax payable
• And the parent has tax payable

The transfer creates immediate family-level savings.

This requires coordination.

 

5. Common Student Slips

Students often receive multiple slips:

T4 – Employment Income

From part-time or summer jobs.

T4A – Scholarships, Bursaries, Research Grants

Many scholarships are exempt if:

• The student is enrolled in a qualifying program
• Conditions under ITA scholarship provisions are met

T2202 – Tuition and Enrollment Certificate

Required to claim tuition credit.

All slips must be reported — even if tax is low.

 

6. Scholarship and Bursary Basics

Many scholarships and bursaries are tax-exempt if:

• The student is enrolled full-time in a qualifying educational program

However:

Research grants may not be fully exempt.

Misreporting can trigger reassessment under ITA s.152.

Students should review CRA guidance carefully.

 

7. Moving Expenses for Students (ITA s.62)

Under ITA s.62, moving expenses may be deductible if:

• You move at least 40 kilometres closer to:
  • A new job, or
  • A business, or
  • A qualifying educational institution

Students often qualify when:

• Moving for full-time post-secondary education
• Relocating for a co-op or internship

However:

Moving expenses are deductible only against income earned at the new location.

No income = no deduction (but may carry forward).

 

What Expenses Qualify?

CRA guidance includes:

• Transportation and storage
• Travel costs
• Temporary accommodation
• Certain incidental costs

Receipts must be retained.

 

8. Summer Jobs and Tax Withholding

Students often overpay tax through payroll withholding.

If income is low:

• Refunds may result
• Tuition credits may not be needed immediately

Even with low income:

Filing is important to:

• Establish RRSP room
• Maintain benefit eligibility
• Trigger GST/HST credit (if eligible)

 

9. Filing for the First Time as a Student

Students turning 18 should file even if:

• Income is minimal
• No tax is payable

This establishes:

• CRA history
• Contribution room tracking
• Benefit eligibility

Do not skip early years.

 

10. Parent Coordination Strategy

For families:

• Review tuition transfer eligibility annually
• Evaluate whether parent or student should benefit
• Coordinate scholarship reporting
• Track moving expense carryforwards

Family-level planning creates optimal results.

 

11. When to Seek Professional Advice

Students should seek advice if:

• They have foreign scholarships
• They conduct freelance work
• They earn self-employment income
• They receive research grants
• They move between provinces
• They are international students

The first few filing years shape long-term compliance.

 

Final Thoughts

Under:

• ITA s.118.5 – Tuition tax credit
• ITA s.118.8 – Transfer rules
• ITA s.62 – Moving expenses

Student tax returns involve more than simple data entry.

Tuition credits are long-term assets.
Transfers require family coordination.
Moving expenses require precise eligibility analysis.

For students and families with incorporated businesses, trusts, or foreign assets, tax planning must be structured — not improvised.

At Shajani CPA, we help families align education planning with tax strategy and long-term wealth architecture.

Because education is an investment — and so is disciplined tax planning.

Tell us your ambitions, and we will guide you there.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2026 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.