Part of Tuition, Education ... Credits Options

[Peter M]

CRA is clear that one may not transfer amounts unless they are over what is necessary to reduce tax payable to zero.
But is it possible to choose not to use the credit and simply carry the whole thing forward?
Search as I may, I can't find a simple statement 'in any year must be used to reduce tax payable to zero'

Peter M

[GuyL]

CRA is clear that one may not transfer amounts unless they are over what is necessary to reduce tax payable to zero.
But is it possible to choose not to use the credit and simply carry the whole thing forward?
Search as I may, I can't find a simple statement 'in any year must be used to reduce tax payable to zero'

Peter M

The wording from the CRA's student tax guide appears to make it quite clear that it needs to be claimed as soon as possible:

"You can carry forward and claim in a future year the part of your tuition, education, and textbook amounts you cannot use (and do not transfer) for the year. However, if you carry forward an amount, you will not be able to transfer it to anyone. You have to claim your carry-forward amount in the first year that you have to pay income tax. "

from:

http://www.cra-arc.gc.ca/E/pub/tg/p105/p10...html#P179_16322

[Bert_Mulder_CGA]

Peter, check your ITA as to ordering of credits....

[Peter M]

Peter, check your ITA as to ordering of credits....

Rats.
I crawl into a deep hole, covered with shame.
This has never come up, and it had been my contention that
'as soon as possible' was the order of the day,
but when a client appeared with a clutch of unclaimed credits
and a current tax mountain, I couldn't find the directive.

It would have been so useful to have carried these aged credits through ...

Thanks again.

[Tim Parris]

Why not revise the prior returns? Provided that the tuition slips are within ten years, you can still claim the credits on the returns in question. The CRA will revise the returns and carryforward as needed.

[Peter M]

Why not revise the prior returns? Provided that the tuition slips are within ten years, you can still claim the credits on the returns in question. The CRA will revise the returns and carryforward as needed.

You are a gleam in the murk of this case.
My (new) client is not well-provided with paperwork, so I was preparing to work with a newly-acquired set of Assessments.
I hadn't thought I could simply declare the amounts in adjustments to the years in question
and have CRA toil through, applying the credits in successive years.

Oh, tell me that's so.

I still have to get the US college in question to make a formal request for a ruling from CRA,
but they were certainly qualified through the years of the course in question.

Many thanks for your help, from the little guy who tries

Peter M

[spenceh]

You are a gleam in the murk of this case.
My (new) client is not well-provided with paperwork, so I was preparing to work with a newly-acquired set of Assessments.
I hadn't thought I could simply declare the amounts in adjustments to the years in question
and have CRA toil through, applying the credits in successive years.

Oh, tell me that's so.

I still have to get the US college in question to make a formal request for a ruling from CRA,
but they were certainly qualified through the years of the course in question.

Many thanks for your help, from the little guy who tries

Peter M

If you amend the say the 2000 return for a 2000 tuition claim, the client may be reassessed for all years from 2000 to date as the tuition carry forward moves through each year's Schedule 11 carry forward.

If you have any concerns about statute-barred years, you may not want to revisit the old returns.

One client has an employer attributing $300/month as the rental value of accommodations AND over 50% of the meals for the employee, spouse and infant child. The client has discussed this with the employer who is satisfied that CRA rules ARE being applied. (LOL). While the client has been honest, a payroll audit of the employer could result in significant additional taxes if statue-barred returns are reopened. So even honest clients may not want statute-barred returns revisited.

Check with your client before opening any statute-barred years!

[Peter M]

If you amend the say the 2000 return for a 2000 tuition claim, the client may be reassessed for all years from 2000 to date as the tuition carry forward moves through each year's Schedule 11 carry forward.

If you have any concerns about statute-barred years, you may not want to revisit the old returns.

One client has an employer attributing $300/month as the rental value of accommodations AND over 50% of the meals for the employee, spouse and infant child. The client has discussed this with the employer who is satisfied that CRA rules ARE being applied. (LOL). While the client has been honest, a payroll audit of the employer could result in significant additional taxes if statue-barred returns are reopened. So even honest clients may not want statute-barred returns revisited.

Check with your client before opening any statute-barred years!

You continue to add lustre to your profession.
It is my perception that my client swam about in obscure employed work until making a breakthrough as an actor last year.
His mother had been doing his returns, so I can't see anything other than routine claims.
I will however talk to him, and perhaps look at the records there are. to be sure he understands the risks.

A claim in the low six figures makes it a serious opportunity to save tax now that he is making real money.

More as it happens

Peter M