Student Loan interest credits and Education Amounts

[Robert18]

So it seems that Educational amounts carry forward indefinitely (?) , but Student Loan interest credits carry forward for only 5 years.

 

Is there a tax reason that causes Educational amounts to supersede the Interest tax credit?

 

I ask as Ufile is using none of the expiring Interest tax credits in favour of educational amounts.

 

Edit:

Short answer: it is a CRA tax problem.

[Curmudgeon]

So nothing is showing up on line 31900 on the return?

[Robert18]

8 hours ago, Curmudgeon said:

So nothing is showing up on line 31900 on the return?

It shows $0.00 claimed on line 31900 . Line 32300 has a value that essentially negates my tax burden.

It just doesnt make sense to not use the expiring credits first.

[Curmudgeon]

In your T2202 form, what happens if you set Transfer of current year unused amounts to Carry forward?

[Curmudgeon]

If nothing works, contact the technical people and explain how expiring credits are not being applied first. There may be a quick fix.

[Robert18]

15 hours ago, Curmudgeon said:

In your T2202 form, what happens if you set Transfer of current year unused amounts to Carry forward?

There doesn’t seem to be any option that would affect the results without manually adjusting the “Unused amounts” to an amount lower than what is necessary to eliminate my tax burden. Manually setting does allow for interest amounts to be used then. I think it’s best to with you next option and contact them as I think it’s an error in the program.

14 hours ago, Curmudgeon said:

If nothing works, contact the technical people and explain how expiring credits are not being applied first. There may be a quick fix.

Thanks for you assistance.

[Robert18]

So actually looking at Schedule 11 in the return tab answered my questions. Ufile is not clear what's happening. All they will say is that they reduced your credits claimed for interest on student loans, so you can carry them forward (even if its expiring).

 

What is really happening here is that it is a limitation of the Schedule 11 form and it rules for calculating the education amounts to be applied as tax credits. The calculation tells you add all the already applied credits lines 79 to 93, however the student loan interest credit is line 94 so applying any of those credits is wasted until the education amounts are exhausted. 

 

This isn't a problem with UFILE but with the tax form, however UFILE should be more clear about why and how the credits are being applied and the help section does not explain this issue.

[Curmudgeon]

Good to know.

[InnoBerck]

Student loan interest is the interest you pay yearly on a qualified student loan. It includes both mandatory and voluntary prepaid interest payments. You can deduct two thousand dollars or the interest amount you actually paid during the year, whichever is less. The deduction is phased out and eventually phased out when your Modified Adjusted Gross Income amount reaches the year limit for your filing status. And a qualified student loan is a loan you have taken out to pay only for qualified higher education expenses. To clarify the situation, you should contact the financial advisor from the finity group.

[Taduro]

On 4/29/2021 at 1:42 AM, Robert18 said:

So actually looking at Schedule 11 in the return tab answered my questions. Ufile is not clear what's happening. All they will say is that they reduced your credits claimed for interest on student loans, so you can carry them forward (even if its expiring).

 

What is really happening here is that it is a limitation of the Schedule 11 form and it rules for calculating the education amounts to be applied as tax credits. The calculation tells you add all the already applied credits lines 79 to 93, however the student loan interest credit is line 94 so applying any of those credits is wasted until the education amounts are exhausted. 

 

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