New Refundable Education Credit

The Canada Training Credit was introduced in the federal budget this year.

Each year, taxpayers aged between 25-64, who have working type earnings between $10,000 and the top of the third tax bracket (in 2019 this is $147,667) will accumulate a $250 credit that they can use to pay for education costs.

The amount of the refundable credit will be the maximum of either the balance that the taxpayer has in their accumulation account, or one half of the eligible cost of the program. Eligible costs will be similar to what currently qualifies for the tuition credit. The tuition credit will be reduced by the amount of the refundable credit.

The maximum that the taxpayer can claim over their lifetime is $5,000. Once a taxpayer has reached the age of 65, their accumulation account will be dissolved.

The annual accumulation will begin in 2019, and 2020 will be the first year that a taxpayer will be eligible to claim this new credit on their income tax return.

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