As part of efforts to support students facing rising education costs, the Canadian government has introduced updated student tax credits for 2025. These provisions allow students to reduce taxable income, claim deductions on loan interest payments, and offset moving expenses incurred for full-time studies.
With changes implemented under the new Prime Minister, it is essential for students to stay informed about available tax relief programs to maximize their financial savings.
Key Student Tax Credits for 2025
| Tax Credit | Description | Eligibility |
|---|---|---|
| Tuition Tax Credit | Lowers taxable income based on tuition fees paid to an accredited institution. | Students enrolled in recognized post-secondary or occupational training programs. |
| Interest on Student Loans | Provides a non-refundable credit for interest payments made on government student loans. | Only applies to government-issued student loans (not private loans). |
| Moving Expenses Deduction | Allows students to deduct moving costs if relocating at least 40 km closer to school. | Full-time students moving for educational purposes. |
| Canada Training Credit (CTC) | Refundable credit that accumulates $250 annually, up to a $5,000 lifetime limit. | Canadians aged 25-65 earning at least $10,000 annually. |
| Student Tax-Free Threshold | Ensures students earning below a set limit owe no taxes. | Any student earning below $15,000 in 2025. |
1. Tuition Tax Credit – Reduce Your Taxable Income
One of the most valuable tax benefits for students is the Tuition Tax Credit, which reduces taxable income based on tuition fees paid to a recognized Canadian or foreign post-secondary institution.
Eligibility
- Must be enrolled in a recognized educational program.
- Can transfer unused tuition credits (up to $5,000) to a parent, spouse, or grandparent.
- Unused credits can be carried forward to future years.
How to Claim the Tuition Tax Credit
- Obtain Form T2202 (Tuition and Enrollment Certificate) from your institution.
- Fill out Schedule 11 on your tax return.
- Report the tuition amount on Line 32300 of your T1 General Tax Return.
2. Interest on Student Loans – Get a Tax Deduction
Students repaying their government student loans can claim a tax credit for the interest paid on eligible loans.
Eligibility
- The loan must be issued under the Canada Student Loans Act or a provincial/territorial program.
- Private loans, personal loans, or lines of credit do not qualify.
How to Claim the Interest Deduction
- Keep records of loan interest payments.
- Enter the total interest paid on Line 31900 of your tax return.
3. Moving Expenses Deduction – Offset Relocation Costs
Students who move at least 40 km closer to their educational institution can deduct moving expenses from their taxable income.
Eligibility
- Must be a full-time student.
- The new residence must be at least 40 km closer to the school.
Deductible Expenses
- Transportation costs (rental trucks, gas, airfare).
- Temporary accommodation (up to 15 days).
- Storage and travel costs related to the move.
How to Claim the Moving Expense Deduction
- Keep all receipts for eligible moving expenses.
- Fill out Form T1-M and report the amount on Line 21900 of your tax return.
4. Canada Training Credit (CTC) – Refundable Job Training Support
The Canada Training Credit (CTC) is a refundable tax credit designed to help students and workers offset tuition and training costs.
Eligibility
- Must be between 25 and 65 years old.
- Must have earned at least $10,000 in the previous year.
How to Claim the CTC
- Check your Notice of Assessment to see your accumulated credit amount.
- Use the credit for eligible tuition and training fees.
5. Student Tax-Free Threshold – No Taxes Below $15,000
Students earning below the tax-free threshold do not need to pay taxes on their income.
Eligibility
- Students earning less than $15,000 in 2025 are exempt from federal income tax.
- This threshold may be updated based on inflation adjustments.
Maximizing Student Tax Benefits in 2025
To get the most out of student tax credits, follow these essential steps:
-
File Your Taxes Every Year
- Even if you don’t owe taxes, filing your return ensures you can carry forward unused credits.
-
Keep All Receipts and Documentation
- Tuition payments, loan interest statements, and moving expense receipts are required for claiming deductions.
-
Use CRA’s Online Tools
- Check your eligibility and credits on the Canada Revenue Agency (CRA) website.
-
Consider Transferring Tuition Credits
- If you don’t need the full tuition tax credit, transfer up to $5,000 to a parent, spouse, or grandparent.
The Bottom Line
The 2025 student tax credit updates offer valuable financial relief to help students reduce their education costs. From tuition tax deductions to loan interest credits and moving expense claims, these tax benefits are essential for lowering financial burdens.
By understanding eligibility requirements and properly filing tax returns, students can maximize their savings and focus on their academic success.
If you’re a student in Canada, take full advantage of these tax credits to ensure you’re getting the most financial support possible.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.