We pay for our son's university tuition and I am confused as to what TurboTax is doing with regards to the the credit.
Students can transfer up to $5,000 federally. These amounts are reduced by the portion of this year’s tuition and education amounts that the student used on his or her own return.
There is nothing I've read that indicates that the transfer amount is reduced based on the student's income, yet this appears to be what is happening in the parent's TurboTax return.
Our son works part-time while attending university. His net income was$17,000. After keying in his T2202 information, TurboTax told him he could transfer $4400 (federal) and $2400 (provincial) to his parent(s).
When filling out the parents return (i.e., my wife and I), I keyed in my son's net income of $17,000 under "Tell us about your Dependants". On this page, I keyed in his Net Income exactly what appears on our son's return on line 23600. No other deductions or credits are applicable.
On the page titled "Tuition Transfer Amount", I keyed in the amount of Tuition Fees we paid which was $6200 (i.e., Line 9 of my son's Schedule 11). I also correctly specify the # of part time and full time months, and include amounts for the 2020 carryover for federal/provincial.
When on the same "Tuition Transfer" page, I clicked on the "Tuition Transfer" button. I expect to see an amount of $4200 displayed for the federal amount (which would correspond to what TurboTax told our son that he could transfer to his parents.). Instead I see an amount of $2500 for the federal amount, and a reduced amount for provincial as well.
As an experiment, I returned to the "Tell us about your dependence page", an dreduced my son's Net Income from $17,000 to $2,000. When I returned to Tuition Transfer Amount page, I see that the TurboTax has change the amount of tuition transferred from $2500 to something close to $5000.
In summary, both our son's TurboTax return and our own are using the same net income of $17,000. Why does our son's return tell us he do a federal transfer $4200 while my return says I can federal transfer $2500.
Thanks in advance for any help or insight into what is happening. As noted at the outset, there's nothing I've read that suggests the transfer amount is reduced by the child's income. I'd expect both our son's tax return and our own would have transfer amounts that would match.
Thanks in advance for any insight.
