Claiming the interest you paid on your student loans is a great way to lower your income tax payable.
With that in mind, you can only claim the interest you paid in 2016 (and any of the preceding 5 years) if the loan was issued to you under:
- The Canada Student Loans Act
- The Canada Student Financial Assistance Act
- Act respecting financial assistance for education expenses (residents of Québec)
- A similar provincial or territorial government law or
- The Canada Apprentice Loan Act
If it turns out you don’t have any tax payable in the year but you did pay interest on your student loans, it’s generally recommended that you don’t claim the interest amount on your return. Instead, you can carry it forward (up to 5 years) and claim it on a future return.
Remember, only you can claim the eligible interest amounts that you, or someone related to you paid on your student loan. You should also keep in mind that if you aren’t up to date in the repayment of your student loans you won’t be able to claim the interest you paid.
Note: If you’re eligible to claim this federal amount, you’re also entitled to a corresponding provincial tax credit, which might vary in amount depending on which province or territory you live in:
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Prince Edward Island
If you’re a resident of Québec, you might be able to claim the student loan interest you paid between 1998 and 2015 on this year’s return if you haven’t claimed it before.
Note: If you’re claiming your unused student loan interest on your federal return, refer to the most recent notice of assessment (NOA) issued to you by the Canada Revenue Agency (CRA). If you’re also claiming this amount on your Québec return, refer to the most recent NOA issued to you by Revenu Québec.
What types of loans aren’t eligible?
Since the Canada Revenue Agency (CRA) requires that your loan be issued under government laws to be eligible (Canada Students Act, Canada Student Financial Act, or a similar provincial or territorial government law), the interest paid on the following loans does not qualify for this credit:
- Personal loan or line of credit
- A student loan that’s been combined with another loan* or
- A student loan received from another country
*If you chose to consolidate your student and personal loans with a bank or other financial institution, the interest paid on the new loan doesn’t qualify for this credit.
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- On the PREPARE tab, click the LET’S TALK ABOUT 2016 icon.
- Select the checkbox labelled I was a student or I wasn’t a student, but have unused education amounts.
- Click the STUDENTS icon. You'll find yourself here:
- Under the CREDIT AMOUNTS heading, select the checkbox labelled Student loan interest paid in 2016 or interest not claimed in a previous year, then click Continue.
- When you arrive at the Interest paid on a student loan page, enter your information into the tax software.