TD1ON - Provincial tuition credits and Tax Deductions?

[FMinterview]

I noticed on the TD1ON form they removed the line where you put tuition tax credits. Does that mean if I'm starting residency in Ontario, my provincial tuition tax credits I accumulated over the last few years are void and I won't be able to have any provincial tax deductions when I receive my paychques?

[garlic]

Bump!

So based on everything I've been reading online, if you move from OOP --> Ontario for residency, you can't use any of the provincial tuition tax credits you accumulated from doing med school, etc. elsewhere.

But does anyone know what happens if you move back after residency to the province where you accumulated those credits? Do you just pick up where you left off (i.e. carried forward from 2-5 years ago)? Or are those provincial tax credits lost forever because you moved to Ontario...

[ellorie]

Not sure this is true unless it’s changed very recently. I was using my Alberta credits through the 2018 tax year I’m pretty sure. 

[usmdthrowaway]

I’m pretty sure Ontario scrapped tuition tax credits for everyone a couple years ago. But you’ll still get federal tax credits no matter where you went for med school.

[DocBrown9]

1 hour ago, usmdthrowaway said:

I’m pretty sure Ontario scrapped tuition tax credits for everyone a couple years ago. But you’ll still get federal tax credits no matter where you went for med school.

Ya they scrapped it when they decided to Wynne decided to give out "free tuition" (basically just moved the later saving to earlier to make people think they were getting free tuition, classic  Wynne move who was so hungry for power she thought she could buy naive students). Then ford came in and basically removed the grants wynne used to replace the credits in exchange for 10% off tution (as would be expected with conservatives). So basically everyone is now worse off. You can still use any previous credits you have accumulated though. I'd recommend creating a myCRA account. You can see all available credits there.

[garlic]

Hmm so it seems like we're SOL and just lose our OOP tuition tax credits, eh? And no way to somehow bank them until we move to a province that does recognize provincial tuition tax credits...

And on a semi related note, I guess that means only federal tuition tax credits should be entered on a T1213? (Which, to clarify, does not force us to use all our tuition credits if we have other available credits to deduct, right. This form merely shows that we have x amount of credits so our employer should withhold less tax? We don't actually use the credits until we officially file?)

[ellorie]

1 hour ago, garlic said:

Hmm so it seems like we're SOL and just lose our OOP tuition tax credits, eh? And no way to somehow bank them until we move to a province that does recognize provincial tuition tax credits...

And on a semi related note, I guess that means only federal tuition tax credits should be entered on a T1213? (Which, to clarify, does not force us to use all our tuition credits if we have other available credits to deduct, right. This form merely shows that we have x amount of credits so our employer should withhold less tax? We don't actually use the credits until we officially file?)

I’m not sure where people are getting the info that you lose credits you accumulated elsewhere - I was using my Alberta credits after the Ontario government stopped giving out new credits, I’m pretty sure...

[JohnGrisham]

8 hours ago, garlic said:

Hmm so it seems like we're SOL and just lose our OOP tuition tax credits, eh? And no way to somehow bank them until we move to a province that does recognize provincial tuition tax credits...

And on a semi related note, I guess that means only federal tuition tax credits should be entered on a T1213? (Which, to clarify, does not force us to use all our tuition credits if we have other available credits to deduct, right. This form merely shows that we have x amount of credits so our employer should withhold less tax? We don't actually use the credits until we officially file?)

If you have tax credits from your original province, and are filing in Ontario, I find it unfathomable that suddenly you wouldn't be able to use those credits.   That would be a huge oversight.

Talk to an accountant come tax time next year, for the 2020 year filing. 

[helloworldz]

22 hours ago, JohnGrisham said:

If you have tax credits from your original province, and are filing in Ontario, I find it unfathomable that suddenly you wouldn't be able to use those credits.   That would be a huge oversight.

Talk to an accountant come tax time next year, for the 2020 year filing. 

I've heard from residents that they do lose them. I do not know if you can keep your OOP credits in some way or another. @ellorie If you used tuition that you paid up to 2017, it's creditable to my knowledge, but not if you paid tuition post 2017.  

[garlic]

On 6/15/2020 at 12:04 PM, JohnGrisham said:

If you have tax credits from your original province, and are filing in Ontario, I find it unfathomable that suddenly you wouldn't be able to use those credits.   That would be a huge oversight.

Talk to an accountant come tax time next year, for the 2020 year filing. 

For sure, not a great situation at all. Basic consensus from asking around and reading online: if you move to ON from another province after 2017, you can't claim your unused tuition and education amounts from another province.

And from what I understand, there is no ON S11 so no paperwork to show the CRA that you have carry-forward provincial amounts. I.e. poof, your provincial credits are gone

[polarbear89]

45 minutes ago, garlic said:

For sure, not a great situation at all. Basic consensus from asking around and reading online: if you move to ON from another province after 2017, you can't claim your unused tuition and education amounts from another province.

And from what I understand, there is no ON S11 so no paperwork to show the CRA that you have carry-forward provincial amounts. I.e. poof, your provincial credits are gone

That isn’t a good solution. Another tip is to remember that you are still registered as a full time student and so theoretically can still file in your home province as long as you maintain that status. 

[helloworldz]

1 hour ago, polarbear89 said:

That isn’t a good solution. Another tip is to remember that you are still registered as a full time student and so theoretically can still file in your home province as long as you maintain that status. 

I believe you need to change your driver's license within three months of moving to avoid penalties.

As a "student", could you keep your old province's driver's license?

Would you be able to switch your health card and driver's license to the new province if you declare taxes in your old province?

Could the new province ask that you declare taxes in the new province as you are also a "worker"?

[garlic]

Yeah I believe @helloworldz brings up salient points.

To determine province of residency for tax filing purposes, the CRA looks at where you have the most significant ties. Those include things like where you own property, where your spouse and dependents are, which province your vehicle is licensed and registered in, which province's health card and driver's license you have.

For most of us, the majority of our identification will be coming from our new province...so pretty hard to argue to file in our previous province. Plus many of us will be claiming moving expenses, which although can be claimed for studying rather than employment, tends to trigger CRA inspection/audit. So even if we say we're moving for schooling, I wonder how we'd explain away our not insignificant resident salary.

[polarbear89]

@garlic and @helloworldz I changed my license but I don’t own property in the province I’m completing residency in. I spoke to my accountant about it and he said you can make an argument either way and since I’ve moved between multiple provinces for school, I’ve always been filing in my home province. It has been fine for me for the past few years and I know other people who have filed in their home province but definitely look at your individual situation. I changed my health card and license too but my accountant still seemed to think it was fine and it has been for the past while. Obviously once I’m done residency and not a student, I will file in the province I work in at that point. It’s possible my accountant has led me down the wrong path as well.. so happy to see this discussion and make changes for next year if this has been done incorrectly. 

[Aslidoctor]

Current resident in ON

Was not able to claim my OOP tuition tax credits. Used a professional to file this year. Have not received a clear answer as to whether or not they will be saved or simply lost in the future. Accountants back home seem to think they will be saved, and if I return to work there I will be able to use them. Accounting firm in ON does not believe this is true, feel that I will lose them regardless of where I go. Pretty frustrating, haven't been able to clear it up. I trust my accountants back home more but if anyone has any experience with this would be appreciated.

[helloworldz]

For the health card, I do not understand how someone could be covered by one province and not pay tax in that province. I know certain provinces have a time limitation on the amount of time you can be away from your old province, but the definition of tax residency is not uniquely linked to the amount of time you are in one province vs the other.

Does anyone else reading this have any clarification on all these? Even professional advisors give conflicting interpretations.