December 6, 2022

The Queens County Citizen

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Forgotten tax credit | The Journal of Montreal

Forgotten tax credit |  The Journal of Montreal

Already 10 years since the maple spring, it has been inspired by a project to increase salinity in tuition fees.

We know the end. The Charest government surrendered to the perseverance and intensity of this student strike. That party is Quebecois It recovered the following year by reducing the tax credit for tuition fees, which fell from 20% to 8% in 2013.

Fees, taxes and tax hikes never fail to fuel resentment, but cuts in tax credits, which affect our wallets to a lesser extent, usually lead to complete indifference. Many Kubeckers ignore this credit for tuition fees, which gives you the right to receive a few hundred dollars.

A good gift for the government …

Tens of thousands of dollars

An accountant from Saint-Jean-sur-Richelieu gave me a tip. Eric Brazio contacted me after I published a column I dealt with about RRSP contributions that taxpayers neglected to declare. He noted a similar exception with the Quebec tuition credit.

Three years ago, Eric Brazio decided to check the 4274 client files. He repaid $ 171,000 in tuition, for which 20% of the credit was unclaimed, and the dispersals belonged to the pre-Red Square era. That’s more than $ 34,000 in tax refunds.

In the same transaction, the accountant received $ 176,000 in tuition, for which 8% credit was carried over. And it is not over. It also forgot about the “tax credit (20%) for interest paid on student loans”.

“If I could find enough money to sleep with 4,000 people, imagine what’s left on the table across Quebec,” the CPA exclaims.

The source of oblivion

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The tuition credit is “non-refundable”, which means you have to pay tax to get the benefit of it. Since students usually earn less money, this credit should not bring them anything immediately. However, they can transfer it to their parents or grandparents or keep it for themselves for years until they start participating in the public treasury.

The federal government provides a similar 15% credit. If it is not used by the parents, it will be applied automatically as soon as the young taxpayer starts paying tax.

In Quebec, tax authorities complicate questionable credit processing. First, it does not appear anywhere except in the regional assessment notice. “The world does not pay much attention to it as it does tax returns through direct deposit,” he said. Brazeau observed.

After all, when taxpayers connect revenue to their clients’ electronic file in Quebec, information related to this credit other than federal credit will not be downloaded from their accounting software. “If they do not have the client’s notice beforehand, they will miss out, that’s for sure,” said Eric Braze.

Simon Elliott, digging up these CPA forgotten RRSP collaborations, I told you two weeks ago, I also regret this situation: “My $ 7,000 accounting software did not download this information. ⁇

So, homework for you: Check if there are any carryover credits in your Provincial Assessment Notice.

And Destiny for Revenu Québec: Make this information more accessible to taxpayers.