Canadian Tax Relief for Post-Secondary Students re Rent Expenses

21258787_sAs I mentioned last time, there are a number of surprises my clients were happy to discover this past tax season. One in particular is the refundable tax credit some post-secondary students receive if they pay rent.

A refundable tax credit can help reduce or eliminate the amount of tax owed.  Excess refundable credits may be paid as a refund – even if no income tax was paid.  In the case of student paying rent this could create a significant refund.

Here is a sampling of the returns I recently prepared and the affect the rent paid had;

Taxable Income

# of Months Rent Paid

Rent Paid

Refundable Credit

Student 1

$4,417

12

$4,740

$345

Student 2

$7,277

8

$4,080

$332

Student 3

$12,893

10

$6,630

$383

It does not actually matter about the number of months.  This is for comparison purposes only.  Even if a parent or guardian pays the rent, the student is the only one that can claim the expense on their personal tax return.

Also, the accommodations do not have to be a single residence dwelling.  A number of students sharing a home, and each paying their own portion for rent qualify.

It is extremely important to have a receipt from the landlord The receipt should include; the landlord’s name and contact information, the address rented by the student, total amount of rent paid and the period of time the rent covered. It’s a lot easier to supply that than copies of canceled cheques if required.

Do you know of someone that missed out on applying for this credit when completing their tax return?  You can still request that the previously filed tax return be re-assessed through a T1 Adjustment.

Next time I will outline what categories of deductions and expenses the Canada Revenue Agency (CRA) frequently requests back-up information for when doing pre-assessments and re-assessments of personal tax returns.

I love getting feedback on the posts. Here on my blog, you’ll get commentluv. This is a plug-in that allows you the opportunity to leave a link back to your own site when you leave a comment!

Until next time,

Maureen

30 replies
  1. Brett
    Brett says:

    I am a full time student at the U of C in Calgary, I have already filed my taxes and received my return but I recently heard that I could have gotten a refund for the rent that I pay. I see that you mention it is possible to still get this refund. I am a little unsure of what form i need to do this. Any help would be great since the whole broke student stereotype couldn’t be any truer!

    Thanks

    Reply
    • Maureen
      Maureen says:

      Hi Brett,

      I apologize for not stating that the refundable credit I was referring to was specific to Ontario students. I don’t know if the province of Alberta has similar or other credits. To see if there are any credits available for your specific situation I would suggest you call 1.800.959.8281. That is the Canada Revenue Agency toll free number for Individual income Tax enquiries. And if you determine you did miss any credits you can file a T1 Adjustment. For details on completing that form google (as in a verb) T1 Adjustment. It will be the first item that is listed.

      Maureen

      Reply
  2. kialover
    kialover says:

    Being a student, this refund certainly helped me out this year. I’m really glad that I was aware of it to make the claim. Thanks a lot for spreading the word!

    Reply
    • Maureen
      Maureen says:

      You are very welcome. I know there is a lot of misinformation that is circulated regarding tax “savings”. If you ever have any questions as to whether something is true or legit, please don’t hesitate to contact me.

      Maureen

      Reply
  3. Everest
    Everest says:

    I am a student on Ontario. I am wondering if I could fill in T1 Adjustment for my 2009 tax return to claim this rent refund? Thank you.

    Reply
    • Maureen
      Maureen says:

      Hi Everest,
      Yes a T1 Adjustment is exactly what you need to do to claim your rent expense. You will also need to send in a receipt, copies of cancelled cheques (front and bank) or a statement from your landlord. These should indicate your landlord’s name and address, your name and rental address, amount paid in rent and period of time you rented i.e. January – May

      Maureen

      Reply
  4. David Taylor
    David Taylor says:

    My son attends Queens and works back in Alberta for summers. He files Alberta Taxes. Would he qualify for the rent the rental tax relief? If so would you know what forms he would need to fill out?

    Reply
    • Maureen
      Maureen says:

      Hello David.

      Hello David, No he would not be eligible for the Ontario credit. The credit is applicable to tax returns filed on behalf of the Province of Ontario. I don’t know if Alberta has an equivalent type of credit that could be applied when filing his personal tax return.

      Maureen

      Reply
  5. David
    David says:

    Hi,

    I am an Ontario resident attending University in the UK. I know that my tuition fees are deductible but I was wondering if I can deduct the rent I pay for my flat in the UK. I can’t seem to find any information on this – any chance you know where I could find out?

    Thanks for the help!

    David

    Reply
    • Maureen
      Maureen says:

      Hi David

      You need to pay rent in Ontario to claim the Ontario tax credit, so your U.K. rent is an ineligible expense, sorry.

      Maureen

      Reply
  6. Milly
    Milly says:

    My daughter rents a room under the landlord’s home and she refused to issue a rental receipt. The landlord said because she charges cheaper rent and not include the GST in the rental fee so she doesn’t have to issue it. How much more would she have received if she were to claim the rental in her income tax return?

    She made less than $5000 this year, attended school in college with OSAP etc. and paid $500/mth, a total of 7 months of rent?

    Reply
    • Maureen
      Maureen says:

      Hi Milly.

      This must be very frustrating for you and your daughter. Let me clarify something for you and other readers – there is no GST/HST charged on a personal rental, unless you’re staying in a hotel or motel. No matter how much the landlord could charge for rent they cannot add the tax to it.
      I think the landlord is just avoiding reporting the income she’s earning on her personal tax return. That’s why your daughter is not getting a receipt, not because the rent is cheap. That said it would have a significant impact on additional money your daughter could receive if she had a receipt for the $3,500 for 2012.
      Using only $5,000 income your daughter would be eligible for $273.00 through the Ontario Trillium Benefit Fund. With the rent receipt she would receive $886.00, and increase of $613.00. If you paid the landlord with a monthly cheque and have copies of those cheques I would go ahead and claim the rental expense. If you paid cash I would not advise you to proceed with claiming the rent paid. The CRA monitors those credits very closely and will demand proof of payment.

      Good luck, Maureen.

      Reply
  7. JOhn
    JOhn says:

    hi Maureen, an unrealed question for a moving expense to move to college am i able to claim the truck/van rental as well as the gas used to move?

    Reply
    • Maureen
      Maureen says:

      Hi John
      Yes you can claim the cost of the rental truck or van along with the gas used. When moving costs are incurred to go to a post-secondary institute they can only be expensed or deducted against any bursaries, scholarships and research grants received in the year of the move. And the move must be 40 kilometres or greater to be eligible.

      Maureen

      Reply
  8. Evan deCatanzaro
    Evan deCatanzaro says:

    Do you suppose that a tenancy agreement would suffice instead of a receipt? It would certainly save me the trouble of having to contact my old landlord again. What section of the Provincial (Ontario) tax forms would I use to claim rent information?

    Reply
    • Maureen
      Maureen says:

      No a tenancy agreement will not substantiate your claim for rent paid to your landlord. The CRA wouldn’t know if the agreement was upheld for the duration of the lease term, or even if it was implemented.
      You would need cancelled cheques or a letter from your landlord indicating the number of the months you were a tenant, the total amount you paid for the year, the address where you were a tenant and the landlord contact information.

      To complete the form on your personal tax return the schedule is ONBEN

      Maureen

      Reply
  9. John
    John says:

    I want to claim a portion of the rent paid for my daughter. I entered the amount in the ONBEN worksheet but there is no change to the refund amount.

    Would appreciate your help and advice.

    Thanks

    Reply
    • Maureen
      Maureen says:

      Hi John

      Starting in 2012 for the 2011 tax returns the rules changed on the refundable credit that could be generated through rent of property tax paid. The Provincial Government introduced the Ontario Trillium Benefit Fund. In summary what would have been a previously refundable credit or reduction in tax liability calculated when filing the return with the Federal government was handed over to the Province. They in turn pay that credit, along with a sales tax credit depending on income, in monthly amounts. So even though you didn’t see an adjustment when completing your daughter’s return you should receive a notice from the Ministry stating what your daughter will receive a specific monthly starting in July 2013.

      Maureen

      Reply
  10. Chantal
    Chantal says:

    Hello! This post has already been very helpful, so thank you for putting it up. I am an international PhD student in Ontario and I’ve been paying rent with my common-law partner (who is Canadian) while I study. I want to include my share of the rent in my taxes, but the cheques that go out every month are from his account (I deposit my half in it every month), so I don’t know what kind of proof I would have to submit for my taxes… Should I just supply copies of those cheques though they are under his name? I could also show the deposits I make to his account everything month that I put in for rent? I’m not quite sure how to proceed. Thank you!

    Reply
    • Maureen
      Maureen says:

      Hi Chantal

      When you’re filing as a couple it’s usually best if one person claims the rent. With a common-law partner, which in this case has the same status as a married couple, the credits available regarding rent paid is based on the combined income. I will assume your partner has a receipt from the landlord in his name for the total amount of rent paid in 2013. Either your partner or you can claim the rent paid with the one receipt. If you want to keep your portion of the rent separate then I would suggest you have a copy of the landlord’s receipt with your partner indicating that 50% of the rent paid is for you and the other 50% is the amount he is claiming. If possible ask the landlord for separate receipts to make this more acceptable to the CRA if they ask for it.
      Maureen

      Reply
  11. Ann
    Ann says:

    Hello, I appreciate you having this forum and am looking for a bit of help. My son lived away for the past 2 years for college, he had no income until last summer. He will be filing his taxes for the first time and would like to know if he can claim his rent – it was a student rental apartment with a lease for 2011-2012 / 2012-2013. If he can claim this expense, is he able to claim for both years now that he is filing his taxes? And also if so can I ask which line of the CRA form would we submit the amount paid? Thank you very much .. Ann

    Reply
    • Maureen
      Maureen says:

      Hello Ann
      Your son can only claim the rent he paid in the tax year he’s preparing his return for. If he paid rent in 2013 for 2013 he would include that when preparing his 2013 return. If he’s preparing his 2014 return and didn’t pay rent in 2014 then no rent can be claimed. You cannot carry forward those amounts.
      Maureen

      Reply
  12. Pat Polan
    Pat Polan says:

    Hi Maureen,
    I am quite interested in what the last person asked. My daughter paid rent in 2014, but I am not sure what forms I need to fill out to be able to claim it. Could you please help?
    Cheers,
    Pat

    Reply
  13. Iona
    Iona says:

    Hi Maureen,
    My daughter is studying in Montreal but files her taxes in Ontario because that is her principle residence. Can she claim the rent paid for her student accommodation in Montreal on her taxes.
    Thanks.
    Iona

    Reply
    • Maureen
      Maureen says:

      Hello Iona
      No she can’t claim the rent she pays in Montreal. The credit available for rent is Provincial, so only rent paid in Ontario is allowable.

      Maureen

      Reply
  14. Helen
    Helen says:

    Hi, Maureen,

    My kid studies in Montreal and comes back to Ontario for her summer job and lives at home. Can she file some rental expenses (paid to parent) to maximize the sales tax credit? if yes, what is the best amount and period to avoid tax consequence on parents’ tax return?

    many thanks.

    Reply
    • Maureen
      Maureen says:

      Hello Helen.
      If you want your daughter to claim that she paid rent to you during the summer you would have to supply her with a receipt for the payment. The tax receipt you give your daughter must specify the address, period of time rented and amount paid. You need to show almost the identical information on your personal tax return. I don’t think the tax consequences are worth the possible tax credit. If she came back and worked during the summer you may want to look at the moving expenses, from Montreal and back, that can help reduce any taxable income now, or in the future.
      Maureen

      Reply
  15. Deanna
    Deanna says:

    Hello Maureen,
    My daughter finished her first year as a university student in Ontario and lived with us-her parents, not in residence. We live in an apartment and pay for the rent. We did not apply for Ontario Energy and Property Tax Credit, but my daughter did apply for the amount of rent we paid for the apartment in 2016 (her income for 2016 was $5000). CRA sent us a letter inquiring about the rent paid for my daughter. I asked the landlord about this and they provided me with a letter that stated that my husband and I lived in that specific apartment and that we paid the rent for it-including the amount in dollars, but my daughter’s name doesn’t show up anywhere. Is what we did correct? What should we do next?
    Please advice me,

    Reply
    • Maureen
      Maureen says:

      Hello Deanna.

      You should have claimed the rent and not your daughter. The reason the CRA questioned your daughter’s return in the first place is that she would not have had enough income to pay the rent ($5,000). Since I don’t know her age I question as to whether she would even have been old enough to sign a rental lease. I would suggest you acknowledge to CRA that you made a mistake, which may result in your daughter paying back some of the Ontario Trillium Credit funds she would have received. And you or your husband could file a T1 Adjustment and claim the rental expense on your previously filed tax return.

      Maureen Burleson
      CPB, Certified QuickBooks Online ProAdvisor

      Reply

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