I'm in the process of doing my daughter's 2023 return. TurboTax had calculated a refund of over $1,500 before I entered her university tuition. When I entered the tuition amount from her T2202 slip, the refund changed to $0.01. Unless I'm missing something, entering an expense that is supposed to provide a tax deduction shouldn't result in a smaller refund. Can anyone provide an explanation, or is this a bug? Thanks!
What likely happened is that when you put in her income, TurboTax claimed the Canada Workers Benefit (CWB) (aka the Working Income Tax Benefit) for her. This is a refundable tax credit for people who work, but don’t make very much. However, students are usually not eligible for this credit, so when tuition was added, the CWB was removed, lowering the refund. Other credits might be affected as well, as the tuition credit must be used before other credits, like the dividend credit.
What likely happened is that when you put in her income, TurboTax claimed the Canada Workers Benefit (CWB) (aka the Working Income Tax Benefit) for her. This is a refundable tax credit for people who work, but don’t make very much. However, students are usually not eligible for this credit, so when tuition was added, the CWB was removed, lowering the refund. Other credits might be affected as well, as the tuition credit must be used before other credits, like the dividend credit.
You're right...thanks!
The info on Schedule 6 says, in part:
"You cannot claim the CWB for 2023 if any of the following conditions apply to you:
• You were enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the year, unless you had an eligible dependant at the end of the year"
Just as a test, I changed the number of full-time months on the T2202 from 4 to 3, and the CWB re-appeared. I've since reverted it to the correct 4 months.
It is a common situation these days for a student to take a low-paying job upon finishing their final year of university. It's unfortunate that the CRA doesn't see fit to accommodate that situation.