22 year old child is a US citizen and resident of US his entire life. His mom and dad (both US citizens and US residents their entire lives as well) moved to Ontario, Canada to work in 2011 and are now residents of Canada. Child remained in US and has no intention of moving to Canada. Child received a 1098-T for tuition in the US for 2014. Can this tuition be transferred to parents in Canada on Federal S11 maximum $5000 and Provincial ONS11 maximum $6686?
Does the child need to use the tuition on his US return first (to reduce tax to zero like you have to do on the Canadian side) and only transfer the remainder, or can the entire amount be used in both countries?
If it can be used on the parent’s Canadian return, does he have to get a special form from the US University or do you just enter $5000 and $6686 on the S11 and ONS11?
On the dependant screen it asks for the child’s net income, number of months full time vs. part-time, unused tuition from previous years, etc. I realize that all this information will determine how much the child can transfer to his parents; but how do you get this info off of a 1098-T. This screen makes reference to a TL11 or T2202A. Perhaps the child needs a TL11 form?
Any help with this would be greatly appreciated.
Transfer Tuition US Child to Canadian Parent?
Moderator: Mark T Serbinski CA CPA
SM, my own experience is only with student kids in Canada, and I certainly don’t have all of the answers to all of your questions, but I will try to give you some thought starters based on my Canada-only experience, and some references to look at if you wish to do so.
A student at a Canadian university receives a Form T2202A official receipt from the university, and if the student wants to transfer (current-year) unused tax credits to a parent, for example, the student must sign the transfer to the parent on Form T2202A. So a parent can’t just write in a $5,000 transfer without an official document on which the student has signed over the transfer, and the amount transferred (received by the parent on the parent’s Canadian tax return) gets deducted from the student’s carry-forward tax credits on the student’s Canadian tax return.
Even in Canada, with a Form T2202A, the form says that if the student does not live in the same province as the parent, phone the CRA for further guidance.
For students going to university outside Canada, I believe that the form (official receipt from the university) would be a CRA Form TL11A, and it also includes a declaration section where the student would sign for a transfer (to a parent, for example), just like on the T2202A.
But in any event, the transfer event that takes place is that the student is transferring unused (unused in the current year) tuition and education credits from the student’s Canadian tax return to the parent’s Canadian tax return.
In the scenario you describe, it appears that the student is not filing a Canadian tax return, so I don’t immediately see how a transfer to the parent’s Canadian tax return could work – but I stress that I don’t have any experience with any scenario similar to what you describe – maybe there is something that I’m simply not aware of – and I certainly don’t know anything about the US side of it.
If you are interested in reading further details on the Canadian side of this, may I suggest looking on the CRA website at Income Tax Folio S1-F2-C1 and Income Tax Folio S1-F2-C2, which provide a lot of detailed information, and also you could review Form TL11A and see what it says. Just type these into the search box on the CRA website, if interested.
Many of the years in which I claimed the unused tuition credit transfer from my kids, on my tax return, I received a letter from the CRA Review Section in July (correspondence audit) asking me to send in the receipt with the student’s signed transfer declaration, so they appear to look at this carefully and regularly.
A student at a Canadian university receives a Form T2202A official receipt from the university, and if the student wants to transfer (current-year) unused tax credits to a parent, for example, the student must sign the transfer to the parent on Form T2202A. So a parent can’t just write in a $5,000 transfer without an official document on which the student has signed over the transfer, and the amount transferred (received by the parent on the parent’s Canadian tax return) gets deducted from the student’s carry-forward tax credits on the student’s Canadian tax return.
Even in Canada, with a Form T2202A, the form says that if the student does not live in the same province as the parent, phone the CRA for further guidance.
For students going to university outside Canada, I believe that the form (official receipt from the university) would be a CRA Form TL11A, and it also includes a declaration section where the student would sign for a transfer (to a parent, for example), just like on the T2202A.
But in any event, the transfer event that takes place is that the student is transferring unused (unused in the current year) tuition and education credits from the student’s Canadian tax return to the parent’s Canadian tax return.
In the scenario you describe, it appears that the student is not filing a Canadian tax return, so I don’t immediately see how a transfer to the parent’s Canadian tax return could work – but I stress that I don’t have any experience with any scenario similar to what you describe – maybe there is something that I’m simply not aware of – and I certainly don’t know anything about the US side of it.
If you are interested in reading further details on the Canadian side of this, may I suggest looking on the CRA website at Income Tax Folio S1-F2-C1 and Income Tax Folio S1-F2-C2, which provide a lot of detailed information, and also you could review Form TL11A and see what it says. Just type these into the search box on the CRA website, if interested.
Many of the years in which I claimed the unused tuition credit transfer from my kids, on my tax return, I received a letter from the CRA Review Section in July (correspondence audit) asking me to send in the receipt with the student’s signed transfer declaration, so they appear to look at this carefully and regularly.
Thanks for the info K10, this was helpful.
You bring up a very good point about the student having to sign the T2202A. I'm guessing it's not possible to transfer tuition without signing something.
Your assumption is correct, the 22 year old has no obligation to file a Canadian tax return. I suppose the TL11A is really for a resident of Canada that is going to school in the US; say for example in a border city commuting to the US every day? Not sure if this form would be applicable for a US resident? Perhaps there is another form?
Anyone else have any experience with this? Nelsona?
You bring up a very good point about the student having to sign the T2202A. I'm guessing it's not possible to transfer tuition without signing something.
Your assumption is correct, the 22 year old has no obligation to file a Canadian tax return. I suppose the TL11A is really for a resident of Canada that is going to school in the US; say for example in a border city commuting to the US every day? Not sure if this form would be applicable for a US resident? Perhaps there is another form?
Anyone else have any experience with this? Nelsona?