Do not claim tuition if reimbursed? Why does it reduce my return significantly?

[bergen-derek]

My own tuition was reimbursed by a bursary from the University. My wife's tuition was paid for by her parents. Do I claim either?

[TurboTaxJeffrey]

is the bursary reported on a T4A?

[bergen-derek]

Yes it is.

[TurboTaxJeffrey · Accepted solution]

Then you will report both the T4A and the tuition credits.  If you do not report the tuition, then you are taxed on the amount shown on your T4A.  As your wife's parents paid for her tuition, and it is not an arm's length relationship, your wife will also report her tuition.  Depending on your income, it is possible that without the tuition you may have been entitled to the Working Income Tax Benefit, however if one or both of you were full time students for at least 13 weeks in 2016 then you would be ineligible for this credit.  Not including the credit would not help, as you are still students regardless of who paid for the tuition.

http://www.cra-arc.gc.ca/bnfts/wtb/fq_qlfyng-eng.html#q2