Hello, I have a client who has been enrolled in post secondary and collecting tuition credits, in anticipation of using them in the future and not transferring them to his parents. Shortly after completing post secondary, he moved abroad. We have been filing null tax returns over the last 3 years to carry over the tuition credits for when he moves back to Canada. He has just informed me that he is now settled permanently abroad, with no intention to move back to Canada and use his Tuition Tax Credits. Can we refile his and his parents past year returns to transfer the tuition credits to the parents in those years? We would be at the max 7 years at this point (4 years of post secondary + 3 years abroad) They did pay the majority of the post secondary costs. If possible, is paper filing with an explanation be the best way about it for everyone?
I think I would do T1Adj for the necessary years.
I wouldn’t give it more than 1.5 seconds of my time until at least May 2021…
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There will also be the whole “tax-emigration” thing to address, evidence gathering, and “tax emigration” tax returns and forms to file.
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“Shortly after completing post secondary, he moved abroad. We have been filing null tax returns over the last 3 years”
… What has he been doing for the past 3 years plus? …Camping on an exotic beach abroad somewhere getting stoned and begging for money instead of earning any reportable world-wide taxable income whatsoever? 
(Very likely there are zero legal credits available by now if properly filed).
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Additionally, if he has not been aforesaid beach stoner, and has (for example) instead been having a successful post-Canada-graduation high-earning career for 3 years, he may need proper assistance in filing under VDP to avoid the consequences of under-reporting of income for 3 years.
(Does he have copies of income tax assessments for the foreign country for the last 3 years? What is in them?)
Assume from the description that this is the fact situation:
Years 1-4 student is paying tuitions with no/limited income and is resident.
Years 5-7 student is abroad, either studying, travelling or otherwise without income.
For years 1-4 tuitions are transferable to parents to the maximum amount allowable. Further credit transfers are barred (only ones paid in the current year qualify). If the original returns were filed with transfers to the $5K max, there isn’t much else you can do. For the qualifying years, Re-File or T1-ADJ with suitable documentation.
If he’s emigrated there are other issues not relevant here.
I have a client who studied abroad at a very reputable school on a full scholarship for several years. She had zero time to work at a paid job.
This quote stands out for me … even as a non-resident not filing a Canadian tax return, the tuition credits will still be there - I don’t think you need to file a null return to maintain those credits. I have a client of Canadian citizenship who has been living in Dubai for almost 20 years. I file a T1159 for her yearly, which just started in 2013. Her CRA Client Summary still shows unapplied tuition credits from when she was a student in Canada before moving to Dubai.
My guess would be that CRA might not allow going back beyond the 3 years to transfer these credits to the parents due to the 3 year Statute of Limitations. On the Provincial side (the xx428 forms), the provincial gov’t, at least in Manitoba, also bucks at accepting these late entry forms beyond 3 years even when submitted through the voluntary disclosure program or a detailed letter of explanation. In Manitoba, I often call Manitoba Tax Inquiries for insight in these matters as it’s just too difficult to get through to talk to anyone at CRA these days. You may want to phone your provincial tax inquiry line for some insights on how they will handle it.
I was advised by a senior CRA agent to keep filing null non-resident returns to keep the tuition credits carrying over properly, otherwise past 7 years for a non-resident they may not be recoverable. Is anyone else doing this or was this agent off his rocker with this suggestion?
Thanks for the tip @kosakworld and @joe.justjoe1 - not wanting to touch this till May!
“I was advised by a senior CRA agent to keep filing null non-resident returns”
In your first post, you said that the intention to tax emigrate from Canada was only formed in 2021. So he has not filed a “departing canada” T1 yet?
Therefore, nobody could have given instructions or advice to file some kind of “non-resident return” until 2021?
If he was filing “tax resident” tax returns, the law requires that they report ALL world-wide income. This was unlikely to have been “null” for 3 years, as food and accommodation cost money, which needs to have come from somewhere…
There could be a lot of things to fix up.
Departing Canada T1 was filed 3 years ago, as he has tax residency in another Cnd Tax Treaty country over the last 3 years, and has been filing taxes there, and no Canadian sourced income over the last 3 years to claim on a Canadian tax return and no residential ties in CND outside of parents- thus filing has been null. His initial intention was to come back after a couple years (2021) but that has changed now.
This is a different set of facts.
If that was his intention 3 or 4 years ago (tax emigrate from canada), then his decision at that time to not transfer the maximum to parents back then would have been a very foolish one.
Was there really nothing at all transferred to the parents in those pre-leaving 4 study years? Maybe the maximum permitted to be transferred has already been transferred back then.
If it already was, then there is nothing more eligible to transfer, whatever he may think that his own carry forward balance may or may not be.
Yes, I think that is where greed came into play as no tuition transfers were made to the parents in those pre-leaving 4 study years. He wanted to keep them all for his future, and I can’t force it without agremeent between all parties and signatures. I suspect the parents are helping him financially now, and are trying to get at least something out of the deal.
IMHO, since there are logical inconsistencies, such an application would be inviting a CRA auditor who receives it to ask themselves the question: “was he lying then, or is he lying now”.
The taxpayer(s) made their choice on what set of “facts” they were going to present to CRA about 4 years ago, to their best advantage.
Now he/they seek to manipulate history and attempt to have it both ways.