You can claim the interest you paid on your student loans to lower your income tax payable. However, you can only claim the interest you paid in 2017 (and any of the preceding 5 years, if not claimed already) if the loan was issued to you under:
- The Canada Student Loans Act
- The Canada Student Financial Assistance Act
- Act respecting financial assistance for education expenses (residents of Québec)
- The Canada Apprentice Loan Act or
- A similar provincial or territorial government law
If you don’t owe taxes in the year but you did pay interest on your student loans, it’s recommended that you don’t claim the interest amount on your return. Instead, you can carry it forward and claim it on a return for any of the next 5 years to lower your tax payable then.
Remember, only you can claim the eligible interest amounts that you, or someone related to you paid on your student loan. And if you aren’t up to date in the repayment of your student loans, you can’t claim the interest you paid.
Provincial tax credit for student loan interest paid
If you’re eligible to claim the federal amount for your student loan interest, you’re also entitled to a corresponding provincial tax credit, which might vary in amount depending on which province or territory you live in:
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Prince Edward Island
If you’re a resident of Québec, you might be able to claim the student loan interest you paid between 1998 and 2016 on this year’s return if you haven’t claimed it before. Click here for more information on claiming your Québec student loan interest.
What types of loans aren’t eligible?
Since the CRA requires that your loan be issued under government laws to be eligible (Canada Students Act, Canada Student Financial Act, or a similar provincial or territorial government law), the interest paid on the following loans does not qualify for this credit:
- Personal loan or line of credit
- A student loan that’s been combined with another loan* or
- A student loan received from another country
*If you chose to consolidate your student and personal loans with a bank or other financial institution, the interest paid on the new loan doesn’t qualify for this credit.
Where do I claim this?
Follow these steps in H&R Block’s 2017 tax software:
- On the PREPARE tab, click the IN THIS SECTION icon.
- Under Unused tuition amounts you carried forward from a previous year, interest paid on a student loan, and money received for school (a scholarship, grant, etc.), click the Add This button.
- Click the STUDENTS icon. You'll find yourself here:
- Under the CREDIT AMOUNTS heading, select the checkbox labelled Student loan interest paid in 2017 or interest not claimed in a previous year, then click Continue.
- When you arrive at the Interest paid on a student loan page, enter your information into the tax software.