By Todd McCallum, H R Block
A Companion Advisor article

Post secondary students may not have appreciated it when they headed back to classes in September but they started to benefit from new tax credits introduced in the Federal Budget.

A trip to the university bookstore became a little easier with the introduction of the Textbook Tax Credit. Full-time students who are eligible for the education credit receive a $65 per month tax credit for textbooks; eligible part-time students receive a $20 credit per month.

The credit is a flat rate so the amount you actually spend on textbooks is not a factor," explains Cleo Hamel, a senior tax professional with H&R Block Canada (hrblock.ca). "But it does mean students won't have to find their September book store receipt at tax time."

In addition, students have a number of other tax credits or changes to remember when preparing their 2006 return.

Under the old rules, any scholarship or bursary amount over $3,000 was counted as income and part of the tax payable calculation," says Hamel. "Now all scholarship or bursary amounts are excluded from income as long as the student qualifies for the education amount. It can make big difference at tax time."

For many students, public transit is an easy way to get to and from campus. The new Tax Credit for Transit Passes means any transit pass of a month or more qualifies for a tax credit. Monthly passes and receipts are needed to make the claim.

Many students may not realize that if they had a summer job or work through the school year, they qualify for the Canada Employment Tax Credit," says Hamel. "This year it will only be claimed against your first $250 of employment income. However, in future years, it will be claimed against your first $1,000. And you don't need any special receipts to claim this credit."

Hamel adds that it is important to keep all your receipts and slips together so they are easy to find at tax time.

It may take a little effort to organize things in September, but it will help ensure you get all the tax savings you are entitled to next year," says Hamel.

More information is available online or toll-free at 1-800-HRBLOCK.

Notice: Fiscal Agents Financial Services Group are not engaged in rendering tax, accounting or legal professional services or advice. The comments in this article are not intended, nor should they be relied upon, to replace specific professional advice. Before acting on material contained herein. Readers should seek advice that is appropriate to their personal circumstances from a professional advisor.

The information in is article is subject to change, therefore be advised its content should be viewed as illustrative to the context of the article. Income tax laws change over time therein rendering certain numbers quoted obsolete. Please consult current tax rules or directly at CCRA

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