About Jiayue Tax & Financial Planning:
Jiayue Tax Planning is jointly offered by Michael Gao CPA Inc. and its affiliated firm,
Citistar Wealth Management. We combine our professional expertise in tax and wealth management
to serve every client. With our professionalism, we help power your success.

We are often asked: “Do university students need to file tax returns?”
Today, let’s answer this question.

Many people think that only those with income need to file tax returns,
and that if you have no income, you don’t need to file.
In fact, that’s not true. Even if you have no income, filing a tax return has important benefits.

For university students with no or very low income, filing taxes can not only save future personal income tax,
but can also bring additional low-income tax credits and refunds. Why not take advantage of it?

Main Benefits of Tax Filing for University Students

1. Tuition Can Be Carried Forward to Reduce Future Income Tax

For example:
Suppose a university student pays tuition of $25,000 per year.
Over four years, total tuition would be $100,000.

Assume that in the first year after graduation, this student earns income of $20,000.
After the basic personal exemption (about $12,000), there is $8,000 of taxable income.

Because the student has already paid enough tuition in previous years,
they can use those tuition amounts to offset this $8,000 of taxable income.
That means the student does not need to pay any income tax in that first year.
The remaining unused tuition of $92,000 can be carried forward to offset income in the second year and beyond.

Using the current lowest BC marginal tax rate (about 20.06%) as an example,
$100,000 of tuition can save approximately $20,006 in taxes over time —
not a small amount!

Some people think they can just wait until they have income to start filing taxes,
since tuition credits can always be claimed later anyway.

Using the same example, if the student waits until their first income year to file and only then tries to claim
the previous years’ tuition, they would first have to pay about 20.06% tax on that $8,000 — roughly $1,600.
Because the CRA has no prior record of their tuition being reported,
they cannot use tuition to offset their income in that first year.

In this case, they would need to file adjusted returns for each prior year to report the tuition,
and only after the CRA finishes processing those adjustments will the tuition be recognized and carried forward.
Then, starting in the following year, the tuition credits can finally begin offsetting income.

Adjustments can be made for up to ten prior years, but the process is time-consuming and complicated.
From a professional standpoint, we strongly recommend that students file their tax returns
every year and on time.

2. Students Aged 19+ May Receive GST/HST and Provincial Low-Income Credits

University students who are 19 or older can receive:

• The federal GST/HST credit for low-income individuals
• Provincial low-income credits/refunds (for example, in BC)

Between July 2019 and June 2020, in BC, the provincial low-income credit
could be as high as $450.48 per person per year,
and up to $901 per year for a couple.

If you do not file a tax return, you cannot receive these benefits.

What Do Students Need to Prepare to File Taxes?

After reading about these benefits, you might be eager to file your taxes right away.
Before you do, let’s look at what documents and information you should prepare:

1. Social Insurance Number (SIN)

Every Canadian citizen or permanent resident has a permanent Social Insurance Number (SIN).
With a SIN, you can file taxes to report tuition and claim low-income tax credits.

International students with a valid study permit or work permit can apply for a temporary SIN
in person at Service Canada or online:

https://eservices.canada.ca/en/Sin/

Temporary SINs for international students usually start with the digit 9
and have nine digits in total.

2. University Tuition Slip (T2202 or T2202A)

Tuition receipts should be based on the official T2202 or T2202A form.

These forms are issued by the school. Most Canadian universities provide them online.
Students can log into their school portal at the beginning of the following calendar year
to download the tax form for the previous year’s tuition.

If you are studying outside of Canada, you will need to contact your school and have them complete
the tuition certificate form required by the Canada Revenue Agency (CRA) as evidence.

3. Open a Chequing Account

It is highly recommended to open a bank chequing account.
When filing your tax return, you can provide your bank account information to the CRA so that
any tax refunds or credits can be deposited directly into your account.
This is fast, convenient, and avoids the risk of lost cheques.

4. Keep Your Notice of Assessment

After you file your tax return, you will receive a Notice of Assessment from the CRA.
This document shows your income for the year, tuition carried forward, and other important details.

The CRA may later send a letter to review whether the tuition reported matches the T2202/T2202A slips.
If you receive a letter from the CRA, you must read it and respond promptly.

If you change your address, be sure to notify the CRA to avoid missing important mail.

5. Register a CRA My Account

After your first tax return is filed, we recommend registering for
CRA My Account using the information on your Notice of Assessment.

With My Account, you can:

• View your tax filing history at any time
• Check your tuition carryforward amounts
• Update your banking information for direct deposit
• Update your marital status and address
• Track benefits and credits such as GST/HST and provincial payments