How to Claim Interest Paid on Student Loans in Ottawa

A non-refundable tax credit represents an amount of money that can be used to decrease¬†one’s taxable amount (income). However if the total amount of these credits exceeds your federal tax, you are not entitled to a refund hence the term non-refundable.

In Canada, it is possible to claim an amount for the interest paid on your student loans if said loans meet certain requirements. This Step by Step guide details everything you need to know in order to claim your student loan interest as a non-refundable tax credit.

Note: If your student loan qualifies, you are eligible to claim an amount both federally and provincially (Ontario).

Instructions

  • 1

    Who Can Claim an Amount?

    Only you can claim an amount for interest charged on student loans that you or someone related to you paid on your student loans.

    You can only claim an interest amount that you have not previously claimed. If you have no tax payable for a given year (likely for many students) you can carry forward the interest for up to 5 years and claim it against future tax payable.

  • 2

    Amount

    The amount varies based on several factors including the principal loan amount (or the amount remaining) as well as the interest rate that is being charged. More often that not, a loan received under one of the eligible acts or laws will have it so that loan and interest information is provided to you for tax purposes.

    For more information on your student loan and interest paid to date, click here.

  • 3

    Eligibility

    In order for your post-secondary student loan to qualify, it must have been received under one of the following:

    - the Canada Student Loans Act

    - the Canada Student Financial Assistance Act, or

    - a similar provincial or territorial governmental law

    Any other student loan is not eligible. This includes the following:

    - a personal loan or line of credit

    - a student loan combined with another type of loan

    - a student loan received from another country, or

    - interest paid in the event that you failed to pay back a student loan

  • 4

    How to Claim the Amount?

    The eligible amount of your student loan to be claimed is to be entered on Line 319 of Schedule 1. Remember to also claim the same amount provincially on Line 5852 of your ON428.

    If you are filing your taxes online (recommended), keep your documentation in case you are selected for audit. If you are submitting your taxes manually, you will be required to submit supporting documentation for your loan interest.

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