A guide for students filing 2019 personal income tax returns
It’s the most wonderful time of the year: tax time! I’ve compiled some guidelines to help full-time students file their 2019 personal tax returns.
Please note: these guidelines only pertain to Canadian residents. If you aren’t a Canadian resident, or are unsure about your residency status for tax purposes, you should seek professional advice outside of this article. This article is general information, and not specific advice for anyone in particular, so please don’t sue me if the Canada Revenue Agency (CRA) audits you and makes adjustments to your tax return.
Do I have to file a return?
Although you may not be required to file a tax return if you don’t need to pay taxes, I still recommend filing one or more of the following reasons:
- If you earned any income during 2019, filing a tax return will create Registered Retirement Savings Plan (RRSP) contribution room that can be used once you’re earning income;
- To claim your tuition credit for all that tuition you’re paying, even if you don’t have taxes payable to use the credit in 2019 (more on this below);
- You may be eligible for the GST/HST credit, even with zero income; or
- If you or your partner wish to receive child benefit payments.
Due date
In light of COVID-19, the government has extended the due date for 2019 personal income tax returns from April 30 to June 1, 2020. The government will also allow individuals to defer their income tax payments until August 31, 2020. However, the government encourages individuals who anticipate receiving a GST/HST credit or Canada Child Benefit to not delay filing their returns.
Tax preparation software
The following tax preparation software is all free or has a free, “basic” version: TurboTax, H&R Block Online Tax Software, SimpleTax, and StudioTax.
I highly recommend electronically completing and filing your tax return rather than doing it by hand. If you change a number in your return using tax preparation software, the software should automatically update the rest of the tax return for this change. Unfortunately, this doesn’t happen when you’re filling out a tax return by hand. Several tax software programs will also allow you to download tax slips on your CRA Online Account directly into the program, making the fun and easy task of completing your tax return even more fun and easy!
Income inclusions
The following are common income inclusions for students:
- Employment income: employers should have sent you T4 slips for employment income earned in 2019. Record this on line 10100 of your tax return.
- Tips and occasional earnings: report tips and other similar income on line 10400 of your tax return if these amounts aren’t included on your T4 slip.
Note that fellowships, scholarships, and bursaries received aren’t taxable up to the amount required to support you as a full-time student in law school. Given how expensive law school is, I would be surprised if any amount of a fellowship, scholarship, or bursary is taxable, but in the event that an amount is taxable, report this amount on line 13010 of your tax return.
Deductions from income
The following are common deductions from income for students:
- Moving expenses (for school): if you moved at least 40 km closer to the school to be a full-time student, you can claim moving expenses on Form T1-M and on line 21900 of your tax return. Unfortunately, moving expenses for school can only be deducted from income earned from scholarships, bursaries, fellowships, prizes, and research grants, so it’s unlikely anyone in law school can actually claim expenses for moving to school, but I’ve noted it here just in case.
- Moving expenses (for work): if you moved at least 40 km closer to work or run a business and didn’t receive any reimbursements for the move, you can claim moving expenses on Form T1-M and line 21900 of your tax return. Moving expenses for work can only be deducted from the income you earned at your new place of work.
- Childcare expenses: if you or your partner paid for childcare expenses so that you could attend school, you can deduct these expenses if the child is under 16 or has a mental or physical impairment. Report this amount on Form T778 and line 21400 of your tax return.
- Interest paid on student loans: it’s only advantageous to claim interest paid on your student loans if you have taxes payable for 2019. Report this amount on line 31900 of your tax return. If you don’t have any taxes payable for 2019, you can carry forward this interest and apply it on your return for any of the next five years.
Tax credits
Tax credits are deducted from your taxes payable. The following are common tax credits that students can receive to reduce taxes payable:
- Basic personal amount of $12,069: all individuals can claim this basic personal amount. Ensure that $12,069 is recorded on line 30000 of your tax return.
- Federal tuition credit reported on your T2022 slip: you should be able to view your T2022 slip on ACORN. Report the amounts on your T2022 slip on Schedule 11 and line 32300 of your tax return. If you don’t have enough taxes payable to offset the credit, you can carry forward the credit indefinitely or transfer it to your partner, or to a parent or grandparent of your partner.
- Medical expense tax credit: enter eligible medical expenses not covered by insurance on line 33099 of your tax return. If you regularly visit a certain pharmacy, dentist, or other health provider, they may be able to provide you with a list summarizing all of your medical expenses for 2019, and the amounts not covered by insurance.
- GST/HST Credit: to apply for the credit, just file your taxes, even if you have zero income.
2020 Ontario Trillium Benefit
If you’re an Ontario resident and paid rent or property tax on your principal residence or lived in a student residence, you may be eligible to receive the Ontario Trillium Benefit. Fill out Form ON-BEN 2019 and submit the form with your tax return.
For more information on your 2019 personal income tax obligations, please see this webpage published by the Government of Canada.
*Editor’s Note: Lucy Yao is a CPA, CA who previously worked in tax and helped people file tax returns.
