Ojaide v The King –Tuition Tax Credits Explained
Paying for school is stressful enough, but missing out on tuition tax credits or claiming them incorrectly can cost Canadians thousands. As tuition fees continue to rise and more Canadians pursue international degrees, the CRA has tightened its scrutiny over who qualifies, how much they can claim, and when they can claim it.
Tuition tax credits can be incredibly helpful in reducing the tax payable by an individual who meets the requirements. These credits are the product of a policy decision made by the government in order to encourage Canadians to pursue education in order to obtain employment.
At the centre of the tuition tax credit is subsection 118.5(1) of the Income Tax Act, a section of the Act that is also central to the decision in Ojaide v The King, 2025 TCC 180.
The Facts
The Appellant was enrolled in a PhD program in England on a full-time basis. In 2022, the Appellant paid more in tuition than what was actually owing for this taxation year. This overpayment ended up being credited to the Appellant’s tuition owing for 2023.
In his return for 2022, the Appellant claimed the tuition tax credit, but also included the overpayment credited to his tuition owing for 2023.
Accordingly, the issue at appeal was:
Whether the Appellant can claim a tuition tax credit for his 2022 taxation year based on the amount of tuition he paid in 2022
OR
Whether the tuition tax credit has to be calculated based on the tuition owed for 2022
The Decision
The court in this decision found that an individual can only claim a tuition tax credit based on the tuition owed for the taxation year.
Takeaways
This decision is an excellent introduction into the rules that revolve around claiming tuition tax credits.
The Act allows tuition tax credits to be claimed by individuals who meet one of the following criteria:
- Students attending an educational institution in Canada
- Students attending a university outside of Canada
- Students who are residents of Canada but commute to a university in the United States of America
- Students engaged in trade, occupational, or professional examination training
It is also important to remember that, to qualify for tuition tax credits, the total eligible fees paid to a post-secondary institution in the year must exceed $100.
Unused tuition credits may be carried forward indefinitely, allowing students with little or no income during their studies to apply these credits in years where their income is higher and the benefit is more meaningful.
Moving Forward
The tuition tax credit, when used appropriately, can lessen the financial burden placed on new grads and set them up for success.
The Ojaide decision is a timely reminder that even small misunderstandings about how tuition credits work can lead to incorrect tax filings or CRA reassessments years later. As CRA compliance activity continues to increase, particularly for students studying abroad or in professional programs, ensuring tuition amounts are claimed correctly has become essential.
Taxpayers who are unsure whether their tuition credits were properly calculated should consider obtaining professional advice to avoid unexpected liability and to maximize the value of their credits.
Ojaide v The King: https://decision.tcc-cci.ca/tcc-cci/decisions/en/item/521543/index.do
Disclaimer: This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions, you should consult a lawyer.
Elias Zafiridis