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Students and Taxes: What’s new?in Tax Advice Information and Updates
Are you currently a student? It may be summer but it is always a good idea to be aware of the tax changes that may affect you as a student. Here’s what you need to know regarding the tax changes for the tax years 2016 and 2017.
Canada Child Benefit: As of July 2016, the Canada Child Benefit (CCB) has replaced the Canada Child Tax Benefit (CCTB) and the Universal Child Care Benefit (UCCB). The CCB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age. The CCB might include the child disability benefit and any related provincial and territorial programs.
Education and Textbook Tax Credits: As of January 1, 2017, the federal education and textbook tax credits were eliminated. However, any unused education and textbook credit amounts carried forward from years prior to 2017 will remain available to be claimed in years after 2017.
Scholarship exemption: For tax years after 2016, changes have been made to ensure the scholarship exemption remains unaffected by the elimination of the education tax credit. Instead of having to qualify for the education tax credit in respect of the program, the student must be considered a qualifying student in respected of the program in the taxation year to claim the scholarship exemption. The definition of a qualifying student is based on the same criteria used to determine if an individual qualifies for the education tax credit under the existing rules.
Qualifying Student: As of January 1, 2017, the term, “qualifying student” was introduced to ensure that income tax provisions relying on the eligibility for the education tax credit, or using terms defined for the purposes of the credit remain unaffected by its elimination. These provisions, such as the scholarship exemption and Lifelong Learning Plan, will instead rely on the eligibility as a qualifying student.
Want to know how these changes will affect you? Contact KD today and we will be glad to help you out!
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