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Student Loan Interest

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Filing Your Return  ->  Students -> Student loan interest

Line 319 Student Loan Interest

Income Tax Act s. 118.62

A non-refundable tax credit for student loan interest can only be claimed by the student, even if it was paid by a related person.  Unused interest amounts can be carried forward for 5 years.

In order for the interest to be eligible, the loan must have been obtained under

bulletthe Canada Student Loans Act,
bulletthe Canada Student Financial Assistance Act, or
bulleta similar provincial or territorial government law for post-secondary education

In order for the interest to be deductible, it must have been paid by the student or a person related to the student.  However, it is only the student who can claim the interest.  If the interest is paid by a person not related to the student, then the interest is not deductible by the student.  Regarding related persons, see our article on arm's length.

If an eligible loan is refinanced, it will lose its eligibility for the tax credit, unless the refinancing is done under the above-mentioned legislation.

There are both federal and provincial non-refundable tax credits for student loan interest.  The tax credit is calculated by multiplying the lowest federal/provincial/territorial tax rate by the amount of the loan interest, except in Quebec, where the rate of 20% is used.

See Tax Court Case Lazarescu-King v. The Queen, which is a case where a spouse paid the interest and tried to claim the tax credit.

See also Tax Information for Students.

Tax Tip:  If you do not need to claim the student loan interest because your taxes are already zero, save it to claim in a future year.

Revised: September 19, 2017

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