CRA outlines key changes for students during the 2024 tax season
By Vama Saini, March 11 2024—
As of Feb. 19, the tax-filing season for 2024 is officially underway, with a payment due date set for April 30 and potential late filing penalties applicable.
In an interview with the Gauntlet, Lisa Ko, a spokesperson for the Canada Revenue Agency (CRA), outlined several key changes, benefits and obligations that will impact students during this tax season.
A significant alteration for the 2023 tax return is the revamped Notice of Assessment. The CRA has redesigned this document to be more user-friendly and comprehensible.
“They are trying to make the notice more simplified so it just easy to view and you look at the information you want to look at,” said Ko.
An introduction in this tax season is the First Home Savings Account (FHSA) for individuals aged 18 to 71 who are looking to buy their first home.
“It’s different than a Registered Retirement Savings Plan (RRSP) because normally, with an RRSP, it’s actually a claimable income that you get taxed on. But the FHSA is specifically for saving up for that first home of yours. It’s non-taxable,” explained Ko.
Students stand to benefit from a double advantage — no taxation upon withdrawal and the ability to claim a deduction when contributing to the FHSA. This gives students a valuable financial tool to support their journey toward homeownership.
“With a deduction, it doesn’t really help you if you don’t have enough income. So if your income is low — maybe you’re only working part-time — it is not beneficial to use the actual tax credit for deductions,” said Ko. “You don’t actually have to claim it every year. You can actually hold on to the deduction itself. Hold on to it within your accounts. Once it comes time to you actually earning the income you’re going to get taxed heavily on, that’s when you should apply it.”
Students with disabilities can now benefit from a fully digital application process for the Disability Tax Credit (DTC). This method allows users to submit their portion of the application online and generates a code for doctors to complete their section. This process significantly reduces processing times and ensures a more efficient experience for those applying for the DTC.
“The DTC itself is a tax credit on your return that you can apply against your own income. Or, if you have a spouse, you can transfer the credit to your spouse because maybe you don’t need it or your income is not high enough. If you’re still a dependant on your parents, you can actually transfer it to your parents, and your parents can claim it on their tax return,” said Ko.
If one does not qualify for certain tax credits but has a DTC, they will automatically qualify for some other tax credits.
“[DTC] also increases the amount of tax credits you are entitled to. Sometimes there are particular requirements that you are not eligible for in tax credits, but if you are qualified for the DTC, then you are eligible for a particular tax credit. It can allow you to become eligible for other tax credits,” explained Ko.
Different types of income have distinct tax reporting requirements. Ko advises students to be mindful of their student status (full-time or part-time) when reporting scholarships. She noted that scholarships are generally tax-exempt for full-time students.
Students with a DTC and who are part-time status are automatically viewed as full-time students.
“If you are a part-time student, but you have a DTC to your name, you are sort of automatically viewed as a full-time student.”
Students in trades or apprenticeship programs can benefit from the increased maximum employment deduction for eligible tools, doubling from $500 to $1000. This aims to support students in covering the costs associated with tools required for their programs.
Ko urges students to remain vigilant against scams and fraud. The CRA will never send messages or emails with links, and communication via social media is not standard practice.
“If we ever make contact — it’s not that frequent — we are aware that people think we are scams,” said Ko. “You are more than welcome to hang up on that person and say, ‘I don’t think you’re real.’ Then you can call our general 1-800 number, which you can find directly online, and speak to an employee who will confirm whether or not someone did actually try to call you.”
Ko advises students to rely on the CRA’s official website for accurate information and to exercise caution regarding unsolicited communication.
“If you have that gut feeling that, ‘I don’t think the CRA would actually contact me like this,’ we probably wouldn’t, and you can call someone to double-check that,” said Ko.
Ko highlights the importance of utilizing online services, such as My Account, an online portal that allows users to make changes to their profiles with the CRA.
For more information on 2023 tax return filing, visit the Student page on the CRA website.