Taxation for students.

• Author: Rawe, Gunnar

Going to university can be a big change for a lot of students. They are finally adults, they might move away and there are a lot more responsibilities. One of these responsibilities that might seem a bit muddy is filing a personal tax return.

Why file?

Many students think that because they won't owe any tax they don't have to file a return. However, by doing so, they could be missing out on a great deal of credits and benefits. Of course, if the student owes tax, they must file a return regardless. If they don't file a return they won't be able to:

1. claim a refund on that summer job they worked--any tax paid on earnings will likely be refunded due to the education tax credits;

2. apply for GST/HST credit, which is a tax-free payment four times a year, or similar provincial payments, such as the Carbon Levy Rebate Alberta will offer commencing in 2017; and

3. carry forward or transfer education-related amounts.

   How to File?

   There are numerous free tax preparation software products that are fairly easy and simple to use. Canada Revenue Agency ("CRA") has a few it recommends listed on its website at http://www.cra-arc.gc.ca/netfilesoftware/. If "online products" is clicked, it should list the various free tax preparation sites.

   There are free tax clinics put on by university or college tax clubs. Some companies will also travel to schools and provide tax services for free. Students should pay attention around February and March for notices regarding these services at their schools. CRA also has a program called the Community Volunteer Income Tax Program that works with community organizations to put on tax preparation clinics where students and other low-income people with simple tax returns can get their returns prepared.

   What to File?

   Usually students' tax returns are fairly simple--there isn't a lot going on in them as students are focused on school throughout the year. The following are some items that would typically be expected on a college/university student's return (the list is not comprehensive, but is a good starting point).

1. T4--A summer job or part-time job for a student during the year is fairly common. The employer will issue a T4 outlining the amount earned, as well as taxes, CPP and EI paid.

2. T4A--This slip documents the scholarship, fellowship and bursary income received by the student. Registered education savings plan payments are also noted here.

3. T5 and T3--Some students may have investments and the income would show up...