Hi Ross, I have accumulated a large amount of tuition tax credits over the past several years. It’s going to be a long time before I can use them, as I am enrolled in medical school starting this September. Is there some way I can materialize cash out of the credits now? If not, am I in danger of losing them before I use them?
-TM, Waterloo, Ontario.
The good news is there is no limit to how long you can carry forward these unused credits. So don’t worry about them expiring Tom. Carried forward amounts must be claimed in the first year that tax is payable. Only the amounts required to reduce your taxes to zero would be claimed, and any remainder would again be carried forward.
The bad news is you can never convert some of these credits to cash. All tax credits reduce the tax-payable-amount. If you do not have any income, the tax credits do not work.
If you would like your family to benefit sooner than later from your hard earned tuition tax credits, you can share them with any parent or grandparent. Or you can share them with your spouse or common law partner.
The most you can share in one year is $5,000 minus the amounts you yourself claimed. If you choose a parent to share with, it does not matter which one to whom you transfer the credit. It can be your mother OR your father, Usually, the choice is made according to whoever needs it more because they have higher income.
My answer above comes with the usual caveats of course. I am not a tax accountant, or a tax expert of any kind. I did consult my own tax preparer before responding to Tom. If this subject is of interest to you, please consult your own independent resources to confirm the best approach for your circumstances.
The modern day garage sale is a craigslist ad or a kijijii ad. It works. Get rid of all your old stuff. You will clear up clutter, and monetize your junk!