Hi, Leah ...
The Tuition / Education amounts are always claimed by the student despite the fact that a parent or grandparent pays their tuition. It is the student who receives the T2202 form from the educational facility, not the parent or grandparent. Yes, the grandparent in this case received a receipt for the tuition, however by itself that receipt is not claimable, even if the student received that receipt. The tuition/education credits are assigned based on the T2202 issued to the student.
If the student has income in the year, the tuition/education amounts are first used on the student's return to reduce their tax payable to $0.00. The unused amount for the current year can now be transferred to the grandparent to a maximum of $5,000 Federal + $5,000 Provincial credits by completing the back page of the T2202. The actual cash value of this transfer is: Federal = 15% of that $5,000; Provincial is based on that provinces tax rate (in Manitoba where I am, it's 10.8% of that $5,000.
The other thing to know, found in section 6 of CRA's Guide P105, is that
"You cannot transfer to your parent or grandparent, or to your spouse’s parent or grandparent, if your spouse or common-law partner claims any of the following amounts on their Income Tax and Benefit Return:
- spouse or common-law partner amounts (line 30300)
- amounts transferred from spouse or common-law partner (line 32600)"
Hope this helps, Leah.
