I moved to US in Oct. 2005. My son is in ON-Canada and started college in Sept. 2005 for which I have paid the tuition fee in July 2005. Can he transfer me the tuition and education amounts so I can use them as a credit on both federal and ON returns? My income in 2005 was only from Canadian sources.
Thank you!
tuition & education amounts transferred to a parent
Moderator: Mark T Serbinski CA CPA
For 2005, since you are still filing a Cdn return (you are a departing resident), you can use any credit available to any other Cdn.
Since you won't be filing in Canada for 2006, they won't do you much past 2005.
Since you won't be filing in Canada for 2006, they won't do you much past 2005.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
In 2006 I am only US resident. I still have some Canadian income in the form of bank interest and EI benefits, taxed at source (10%, respectively 25%). I will be allowed to claim tuition fee paid for my son in Canada in 2006 from this Canadian income? I know that as a non-resident I don't have to file a Canadian return, but what if I want to do so for the afore mentioned reason?
Thank you!
Thank you!
If you have little other income (ie. you don't work in US), you could file a 217 return in Canada to recoup some of the EI tax you paid (regardless of the tuition).
He has to use the tuition and education amounts first, and then can EITHER carry them over OR transfer them to you year-by-year. You cannot carry them forward, you must only use the unused amount in the year it is paid. You and he will have to decide if he wishes to keep the unused portion for himself or give them to you. Since you are also paying US tax on the EI, there may be little benefit in reducing your EI tax very much, since it will merely be taken by IRS, but this would be something to be determioned case-by-case. As I said, if you are earning little money in US, you will probably get back all your EI money even without tuition credits. You will just be left with IRAS and state taxes on your EI.
Remember that you can also, for 2005 and all other years, use the tuition on your US taxes as well, since your son is a dependent for US tax purposes.
As an aside, for the 2005 tax year, you can also add your EI to your departure tax return, (by invoking 217) and have it taxed at your 2005 normal rate rather than the 25% flat rate, again so long as you didn't have much US income for 2005. It is little complex for a departure year, but is fully described in the "Emigrants" guide from CRA, and it probably would end up getting you back at least some of your EI tax (on the portion you were charged 25% tax after departure) if your overall income for 2005 was less than $30K or so. This would be the case even without tuition amounts.
He has to use the tuition and education amounts first, and then can EITHER carry them over OR transfer them to you year-by-year. You cannot carry them forward, you must only use the unused amount in the year it is paid. You and he will have to decide if he wishes to keep the unused portion for himself or give them to you. Since you are also paying US tax on the EI, there may be little benefit in reducing your EI tax very much, since it will merely be taken by IRS, but this would be something to be determioned case-by-case. As I said, if you are earning little money in US, you will probably get back all your EI money even without tuition credits. You will just be left with IRAS and state taxes on your EI.
Remember that you can also, for 2005 and all other years, use the tuition on your US taxes as well, since your son is a dependent for US tax purposes.
As an aside, for the 2005 tax year, you can also add your EI to your departure tax return, (by invoking 217) and have it taxed at your 2005 normal rate rather than the 25% flat rate, again so long as you didn't have much US income for 2005. It is little complex for a departure year, but is fully described in the "Emigrants" guide from CRA, and it probably would end up getting you back at least some of your EI tax (on the portion you were charged 25% tax after departure) if your overall income for 2005 was less than $30K or so. This would be the case even without tuition amounts.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best