Tax Question

[skandalouz_08]

I recently quit my job to go back to school fulltime. Now my parents came to me with a proposal but I need to do some homework on this before I do it and need to understand the tax implications and if its even allowed.

Basically my parents want to claim my student tuition amounts as they are in a higher tax bracket than me and I'll probably end up not really paying any taxes this year anyways. Can I transfer this to my parents based on the fact that:

I don't live at home anymore and
I have claimed my own tuition amounts the past 4 years

TIA

[Zhariak]

I would say its pretty risky business...

I don't know what the chances of you (or them) getting audited are. Also at the same time, chances could increase since you don't live there and since you have been paying them.

This would mean that you'd have to pay more taxes on your income (since it wouldn't be going to tuition anymore).

Also, shit would hit the fan if you guys got busted lying to the tax man.

Anyone feel free to correct me on this. I don't know anything.

Personally I wouldn't do it, just because I have a good relationship with the tax man and wouldn't wanna screw it up.

[benyl]

You can carry forward the amounts for when you start working again.

[kenny]

You can transfer any unused tuition credit to any relative or spouse. You just need to fill out a T2202A form specifying how much you wish to transfer to them.

I don't recall there being a requirement that says the person you are transferring the tuition amounts to, have to be the ones paying the tuition.

However, you should just keep the amounts for yourself as you can carry it over indefinitely.

[Chandler_Racing]

Originally posted by benyl
Incorrect information!

Can you show me where in the Income Tax Act it says that?

[grampafunk]

.

[liquid1010]

If I remember correctly... it can only be transferred to a spouse... not other relatives.

If your parents pay it - they can claim it, but I don't think you can transfer the credit to them even with the T2202A.

[benyl]

Originally posted by Chandler_Racing


Can you show me where in the Income Tax Act it says that?

Nope... cause it doesn't! haha

Everything you need to know is here:

http://www.cra-arc.gc.ca/tx/ndvdls/t...frwrd-eng.html

[skandalouz_08]

I used to be able to transfer it to my parents when I lived at home, so I know you are able to transfer it to your parents.

After talking to an accountant it appears that I can do it with no problems. He hasn't heard anything about needing the person claiming the credit to pay the tuition so I don't think that statement is true, unless someone can prove that through the CRA.

[kenny]

Originally posted by liquid1010
If I remember correctly... it can only be transferred to a spouse... not other relatives.

Can be your spouse or common-law partner, your parents, grandparents, in-laws, future in-laws, and even grandparents on your spouses/common-law's side of the family.

(Says so on the form)