Interest Paid on Student Loans Tax Credit: Who Qualifies and What You Get
Learn how to claim a federal tax credit on the interest you pay for government-funded student loans in Canada.
This tax credit allows you to reduce the amount of federal tax you owe based on the interest you paid on specific student loans during the year.
Who it's for
This is for individuals who are paying interest on student loans that were funded by the government.
What you get
You receive a non-refundable federal tax credit. This means the credit can reduce the amount of tax you owe, but it cannot be used to create a refund if your tax bill is already zero. The credit is calculated at 15% of the interest you paid.
What it costs you
To claim this, you must file your annual T1 tax return. You will need to use a specific form to report the interest amounts.
The catch to know
This credit only applies to interest paid on government-funded loans. If you took out a student loan through a private bank or a commercial lender, that interest does not qualify for this credit.
How to apply
- Gather your records showing the interest paid on your government student loans.
- Complete the required tax form for your annual return.
- Submit your documents through your annual tax filing process.