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As a non-refundable credit, if the tuition amount is greater than the tax owed, the non-refundable credit can only be used to reduce or eliminate the student’s federal/provincial tax bill but won’t generate a refund. According to the Canada Revenue Agency, you aren’t able to use the full amount of the credit, any unused credits can be carried forward to a future tax year, or transferred to a spouse/common-law partner or parent/grandparent.

As seen in our TurboTax article, under Using Carry Forward Amounts: The amounts of unused credit are applied to reduce tax payable automatically. The Canada Revenue Agency (CRA) applies the available tuition amount carried forward every year to reduce your taxes to zero until it has all been used. 

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