Canada training credit – $250 annual credit

Did you know you could claim a $250 Canada training credit (CTC) on your personal tax return? The Canada training credit is a refundable tax credit available to help Canadians with the cost of eligible tuition fees paid.

What is the Canada training credit?

As of the 2020 tax year, the Canada Training Credit was introduced as a refundable tax credit to help Canadians with the cost of eligible training, education, trades & professional exams. You can use those expenses to claim a $250 credit on your personal tax return.

Who is eligible for the Canada Training Credit?

The CTC is available to Canadians that meet all of the following criteria:

• You File a tax return in the year

• You are at least 26 years old and less than 66 years during the tax year you are claiming the credit

• Your CTC limit is more than zero (see “how much is the Canada training credit limit” for more information below)

• You are a Canadian resident

• Tuition or other fees were paid to an eligible educational institution for things like courses OR to qualifying occupational skills courses, trades or professional examination fees

• The fees incurred would otherwise be eligible for the existing tuition tax credit

• Your taxable income is above $10,100 (including Maternity and parental benefits)

• Your taxable income does not exceed the top of the third tax bracket ($152k in 2022)

What counts as eligible tuition fees?

Specific requirements must be met for the costs to be eligible for the Canada training credit.

• Fees paid for courses taken at an educational institution in Canada will qualify for the CTC.

• Canadian institutions that offer courses providing occupational skills and are certified by the minister of employment and social development also qualify.

• Examination fees for licensing or certification

Some items will not qualify as eligible tuition fees, such as:

• Extracurricular student social activities

• Medical expenses

• Transportation and parking

• Board and lodging

You will need to keep your official tax receipt and forms you receive, as they will show the eligible tuition fees paid.

Here is a complete breakdown of all items that are considered eligible tuition fees from the Canada Revenue Agency.

How much is the Canada training credit limit (CTCL)?

The Canada training credit limit (CTCL) is calculated each year and accumulated annually. The formula is unclaimed CTCL from prior years (3 years at $250) + CTC for the current year ($250) less CTC claimed in the current year. Your CTCL started at $250 in the 2019 tax year, and if you have not claimed anything, it has increased by $250 each tax year.

If you have never claimed the Canada training credit, you should have an accumulated Canada training credit limit of $750 going into the 2022 tax year + $250 available in 2022.

How much can I claim in 2022?

The Canada training credit amount you can claim in 2022 is the lessor of these two scenarios:

Scenario 1: Your full available CTCL for the tax year as shown on your latest notice of assessment. This could be $1,000 in 2022 if you have not claimed any CTC in prior years.

Scenario 2: 50% of the eligible tuition and fees paid to eligible educational institutions in Canada.

Can I claim the Tuition Tax credit also?

Yes, you can still claim the tuition tax credit if you claim the Canada training credit. However, the amount you can claim on your tuition tax credit is reduced by the amount you claim for the CTC.

For example, assume your tuition claimable amount is $5,000. You claim $250 for CTC, so you can only claim $4,750 for your tuition tax credit.

Where do I enter the Canada training credit on my tax return?

The CTC must be reported on line 45350 of your income tax return. The amount claimed as a credit will reduce your taxes owing.

To make it easier to file your tax return, I recommend using income tax software or having an accountant prepare and file your taxes. Here is a list of the best income tax software to file your 2022 taxes.

Conclusion

All Canadians should aim to lower their income taxes by using available tax deductions. You should consider claiming the Canada training credit on your 2022 tax return if you have eligible expenses. This is a great personal finance strategy to keep more money in your pocket.

About the Author

Nick Robert is the founder and creator of Nickrobert.com. I created this website to educate Canadians about everything related to personal finance. As a Chartered Professional Accountant & Chartered Accountant, I have worked with many Canadians to achieve their personal finance goals.

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