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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.
If you have any further clarifications, we would be glad to guide you through.
My experience is the opposite to the one above. Last year I wanted to carry forward all my tuition credits, but was unable to do so; Turbotax claimed the maximum amount, even though I did not need them to reduce tax owing. This year, I am running into the same dilemma. How do I carry forward the tuition credits that I don't require, so I might be able to use them in future years?
You can't change how much tuition is being used. You have to use as much as possible on your current return before you can transfer or carry forward any tuition. It may not look like you need to use the tuition, but the refund/balance owing figure that you are looking at is being calculated with the tuition being used.
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