Turbotax: Tuition Carryforward Amounts

 

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Q: Why is one unable to transfer tuition carry forward amounts for provincial? Why does one see a zero dollar for provincial amounts? A: Starting Sept 5th, 2017 provincial amounts were eliminated and hence one may need to declare eligible provincial amounts on T2202 separately!
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Relevant Background: Tuition carryforward amounts in Canada represent unused tuition tax credits that can be applied to reduce your federal and, if applicable, provincial tax payable in future years when you have sufficient income. 

Significance of Tuition Carryforward Amounts
The main significance of carrying forward unused tuition amounts is to maximize the benefit of the non-refundable tax credit, especially for students who often have low or no taxable income during their studies. 
  • Reduces future taxes: When you begin working full-time and earning more money, the carried forward amount can significantly lower your future income tax bill.
  • Mandatory claim: You must claim your carry forward amount in the first year you have to pay income tax. The Canada Revenue Agency (CRA) will automatically apply the necessary amount to bring your tax owing down to zero.
  • Prevents loss of credits: If you don't file a tax return every year that you have unused tuition to carry forward, the amount might not be properly tracked by the CRA and could be lost.
  • Cannot be transferred later: Once an amount is carried forward to a future year, it cannot be transferred to a parent, grandparent, or spouse/common-law partner; only current-year amounts can be transferred. 
How TurboTax Helps
TurboTax tax software streamlines the process of managing and claiming your tuition carryforward amounts. 
  • Automatic calculation: The software automatically calculates the maximum amount you need to use in the current year to reduce your tax payable to zero and carries forward any remainder.
  • Easy entry: You can enter your current year's T2202 slip information and any previous year's carryforward amounts shown on your Notice of Assessment (NOA) into the student section.
  • Schedule 11 completion: TurboTax guides you through filling out the required federal Schedule 11 form (and corresponding provincial forms), which is essential for determining your available credits and the carryforward amount.
  • Optimization guidance: The software can help determine if it is more beneficial to carry forward the credit or transfer a portion (up to $5,000 of the current year's unused amount) to an eligible family member. 
To verify your exact carryforward amounts from previous years, you should refer to your last NOA or log into your CRA My Account. (Google) 

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