Aside from investing in your education, paying tuition can lower your tax bill. By understanding how the non-refundable federal tuition tax credit words, you can make the most of its value through transfers and carryforward provisions.

Eligible Tuition

Tuition paid to a Canadian post-secondary institution is generally eligible for the tuition tax credit, however, some important exceptions apply. To qualify, the course must grant credit toward a post-secondary certificate, diploma, or degree. Fees for academic upgrading, even if paid to a college or university, are not eligible for the credit. Eligible courses must be at least three consecutive weeks in duration and cannot be taken for personal or recreational purposes.

Students who pay more than $100 in eligible tuition fees to a post-secondary school in Canada will receive a T2202, Tuition and Enrolment Certificate. This certificate is used to report eligible tuition on an income tax return.

Eligible tuition fees:

• Admissions fees
• Ancillary fees up to a maximum of $250, unless the fees are mandatory for all full-time or part-time students enrolled at the institution
• Application fees, provided the student enrolls at the institution
• Confirmation fees
• GST paid
• Mandatory examination fees

Non-eligible tuition fees:

• Administrative penalties
• Board and lodging
• Purchases of course materials, such as textbooks and lab coats
• Student social activities
• Transportation and parking fees

Reimbursements, Scholarships, and Awards

Tuition paid by an employer, or reimbursed to a student by an employer, is not eligible for the tuition tax credit if the amount is not included in the student’s income. Similarly, if a parent receives a tax-free tuition allowance from their employer on behalf of a child, the tuition paid using that allowance will not qualify for the credit. However, when an employer provides a tuition award that is included in the student’s income, the student may be eligible to claim the tuition tax credit.

Students who receive scholarships and awards, in full or in part, may still be able to claim the tuition tax credit, even when the funding is not included in income. Financial aid received from an educational institution generally does not reduce the amount of eligible tuition that can be claimed. While specific government assistance programs may limit the amount of tuition that can be claimed, many do not. For example, recipients of the Alexander Rutherford Scholarship can still claim the full amount of their eligible tuition fees.

International Tuition

Students attending post-secondary school outside of Canada may be eligible for the tuition tax credit, provided they are enrolled full-time in a program leading to a bachelor’s degree or a higher credential. Full-time attendance must be certified by the foreign institution, and the program must last at least three consecutive weeks. Correspondence courses offered by foreign institutions are not eligible for the federal tuition tax credit. The Canada Revenue Agency maintains a list of recognized international educational institutions to help students determine whether their tuition qualifies for the credit.

Occupational Development

Certain non-post-secondary courses may also qualify for the non-refundable tuition tax credit. To be eligible, the student must be at least 16 years of age and enrolled in a course that develops occupational skills. Educational institutions certified by Employment and Social Development Canada (ESDC) may issue a T2202, allowing students to claim eligible tuition fees for courses that provide the skills necessary for a trade, profession, or other employment. Generally, introductory coursework does not provide sufficient training and is not eligible unless it forms part of a series of required courses. Fees for second-language courses may also qualify when language skills are necessary for employment or professional enhancement. Note that any amount claimed under the Canada Training Credit must be deducted from the eligible tuition amount.

Eligible tuition fees:

• Fees paid for examinations required to obtain a professional designation, certification, or license to practice an occupation in Canada
• GST paid

Non-eligible tuition fees:

• Entrance fees and annual membership dues paid to professional organizations
• Examination fees paid or reimbursed by an employer
• Fees for admission tests, such as the MCAT or LSAT

Tuition Tax Credit Calculation

 The tuition tax credit applies to eligible tuition fees paid during the calendar taxation year. The value of the credit is calculated by multiplying the total eligible tuition amount by the lowest federal personal income tax rate. For 2025, this rate was 14.5%. For example, a student who paid $4,000 in eligible tuition in 2025 has an available federal tuition tax credit of $4,000 multiplied by 14.5%, equal to $580. The tuition tax credit directly reduces the amount of income tax payable. However, as it is a non-refundable credit, it cannot generate or increase a tax refund.

Although there is no requirement to claim tuition tax credits in the year they are earned, students must use available tuition credits to reduce their federal tax payable before claiming certain other non-refundable tax credits, such as medical expenses, charitable donations, student loan interest, dividend credits, and foreign tax credits. Although many students may not owe income tax while they are in school, it is still important to claim eligible tuition on Schedule 11 of the income tax return. Any unused tuition tax credits can be carried forward indefinitely and used in future years to reduce income tax payable. In other words, a tuition credit that is not needed today can still provide valuable tax savings later. However, eligible tuition must be reported on the tax return in the year it is paid. If eligible tuition is not claimed in that year, the credit cannot be carried forward. There is no limit to the amount of eligible tuition that can be reported and accumulated on Schedule 11.

Unused tuition credits may also be transferred to a spouse, common-law partner, parent, or guardian. The transferable amount of eligible tuition is limited to $5,000, less the tuition required to reduce the student’s tax payable to zero. A student may choose to transfer part of the credit and carry forward the remainder. However, once an unused tuition amount has been carried forward, it can no longer be transferred to another individual.

Contact Fulcrum Group today for more information on making the most of your federal tuition tax credit.

Resources: Government of Canada: Income Tax Folio S1-F2-C2, Tuition Tax Credit