Can you transfer current year tuition amount to a parent if the child already have refunds showing on tax return (T1)? The client has no unused tuition amounts to transfer but since he’s already getting a refund without the tuition fees (this will only increase his refunds) he would like to transfer the tuition amount to a parent. Please advise.
The child must use the tuition/education credit first. To the extent to which the student doesn’t need the credit to eliminate his or her tax (before tax withheld or other refundable credits) then up to $5,000 can be transferred (federally). I would search on CRA’s website or Google for more information.
Then the client cannot transfer anything, since he has nothing to transfer.
The client’s “Likes” are not the determining factor here.
In law, the client MUST use the Tuition before the Education, AND before all transfers, Medical, Donations, Student Loan interest…
You offer up contradictory information. He either has tuition available to transfer (refund before using tuition) or he has “no unused tuition amounts”.
If the tuition slip has been entered on the return and he doesn’t need them, there will be an amount available for transfer. Scroll down and tick the box to transfer to parent.
Always enter tuition slips regardless of if the student needs them, so they can have the carry forward available when the have taxable income in the future.
“He either has tuition available to transfer (refund before using tuition) or he has “no unused tuition amounts”.”
Having a refund doesn’t necessarily mean you’ve reduced your tax to zero which is a requirement in order to transfer unused tuition/education credits. I don’t see the contradiction.
Is it possible to choose a differing amount of Tuition credits to use within a return? TaxCycle optimizes the credits to reduce the income tax owed but could a lesser amount be entered?
I have several foreign employment income returns with taxes paid that generate forgeign tax credits, these credits are removed when I enter any unused tuition from a notice of assessment in the S11 form. Is it possible to enter somewhere in TaxCycle to get a lesser amount for line 14?
Sure, you can override the amount to transfer on the Schedule 11 (federal) and the appropriate provincial form. I’m not sure but the program’s optimization may take the circumstances of those foreign employment returns into account. Check that first.
Remember the ordering provisions.
“Is it possible to choose a differing amount of Tuition credits to use within a return? TaxCycle optimizes the credits to reduce the income tax owed but could a lesser amount be entered?
I have several foreign employment income returns with taxes paid that generate forgeign tax credits, these credits are removed when I enter any unused tuition from a notice of assessment in the S11 form. Is it possible to enter somewhere in TaxCycle to get a lesser amount for line 14?”
…
It is possible to override almost anything in software, but the actual question is: “Does the Income Tax Act allow it?”
- and the answer to that would seem to be:- “No”
(Ordering provisions etc - Foreign tax is S126)
…
Or, as folio S1-F2-C2 puts it:
“2.48 There is no requirement to claim any or all of the available tuition, education and textbook tax credits in a particular year. However, the amount that can be carried forward is determined by the formula in subsection 118.61(1) (see ¶2.50) and does not depend on what the student chooses to claim. Therefore, if a student chooses not to claim all or such portion of the available tuition, education and textbook tax credits required to reduce federal taxes payable to zero before claiming certain other tax credits (medical, charitable, interest on student loans, dividend tax credits and the foreign tax credit), the tuition, education and textbook tax credits not claimed cannot be carried forward and will be lost. Generally, the carry-forward mechanism is designed to address the situation in which a student does not have sufficient tax owing against which to apply the available tuition, education and textbook tax credits available in a particular year.”
Or, as folio S1-F2-C2 puts it:
Is what I was looking for but could not locate for ordering provisions.
Thank you.
I do not override TaxCycle unless I check first as there is always a good reason for the lock downs.
I was not sure on the forgeign income and taxes as it was forgeign taxes paid, this explains it.