When you're a student doing income taxes, what is it that you get back?

Question

I'm a student in Canada and I know you get back your taxes, but does that just include your IE or your actual taxes taken off, or both?

Answer 1

If you made less than $8000, you will get back all the income tax that you paid in while working, plus any overpayments of CPP and EI. Your tuition will be carried forward until you have taxable income to apply it against.

The federal "basic personal amount" for non-refundable tax credits is $8839, which pretty much means that you can make up to that amount before you have to pay federal tax. Your EI and CPP contributions go in this section, as well as your tuition. They all get added up to determine how much you can make before you have to pay tax on it.

Your tuition and education amounts are a non-refundable tax credit, so all they do is reduce your tax liability. You don't get a refund of the excess. So, for example, if you had $5000 in tuition, you would be able to make up to $13,839 (8839+5000) plus whatever EI and CPP. So, if you made only $10,000 you would use only as much tuition as required to bring your tax liability to zero and carry forward the rest. However, if you made MORE income than non-refundable tax credits (bpa+EI+CPP+tuition), then you would still pay tax on the difference. Depending on how much you made, you will still probably get a refund, but it will be a little less than what you paid in.

Answer 2

Just to add to LaLa's excellent answer, you also get credits in the form on "Education Amount". That means for each month you were enrolled in 3 or more classes (60% courseload - 9 credits or more) you receive a $400 per month Education Amount. If you were enrolled part time (less than a 60% load, or less than 9 credits) you can claim $120 per month for your education amount.

The value of your education amount adds onto your tuition, along with your allowable moving expenses if you moved further than 40km for school, your tuition, your EI, and your basic personal amount, to find the amount of tax-free income you can earn.

Exciting!

Speaing of exciting, under proposed legislation there will be a textbook amount of $65 per month for full-time and $20 for each month part-time students. We'll see when that goes through.

I encourage you to read the pamphlet on the Canada Revnue Agency's site at http://www.cra-arc.gc.ca/E/pub/tg/p105/p105-06e.pdf.

Hope this helps.

Answer 3

You will only get any excess tax back.

Unless your employer took off too much EI or CPP, then you will get that back too. To figure out if you paid too much EI, just multiply your inusrable earnings by 1.87% unless you are in Quebec, then you'll have to check the Quebec rate. The max for EI in 2006 was 729.30.