Students may transfer a maximum of $5,000 of the current year’s federal tuition amount minus how much they need to reduce their federal tax owing to zero. Depending on the province or territory’s tuition, education and textbook credits, students may also transfer the province’s maximum amount minus the amount they need to reduce their provincial tax owing to zero.
Blake has $6,000 in tuition credits this year and only needs $2,000 to reduce tax owing to zero. Blake wants to transfer a portion of the leftover tuition credits to a parent.
We can arrive at Blake's eligible transfer amount using the following formula:
$5,000 (maximum amount eligible for transfer) - $2,000 (the amount Blake needs to reduce tax owing to zero) = $3,000 Blake has left to transfer to a parent.
Students must claim their tuition amounts and reduce their own tax payable to zero before they may transfer any leftover credits to an eligible recipient. Once they have claimed their tuition fees, TurboTax will let them know how much of their leftover current-year credits can be transferred to someone else.
If you are the student’s spouse or partner, or the student or spouse/partner’s parent or grandparent, you may be eligible to use their leftover credits to help reduce how much tax you owe.
Your child or spouse can only transfer any tuition credits leftover from the current year, and they can only transfer these credits to one person (even if they’re transferring federal and provincial/territorial amounts). They don’t have to transfer unused credits to the same person every year.
It’s generally best for you take only the amount you need, leaving the rest for the student to carry forward to a future year when they can benefit from it. If you take more of the student’s transfer amount than you actually need to reduce your tax owing to zero, the excess amount will go to waste.
Once your child or spouse transfers their leftover tuition credits and you know how much they transferred, you can go to your tax return and claim the tuition credits they transferred to you.