# Understand of when to transfer tuition credit to parent vs carrying it forward



## cutchemist42 (Oct 15, 2012)

Asking for my GF, as I dont completely understand it. Students will always use the credit to reduce taxes payable to 0, whil unused amounts can be transferred to a parent or carried forward for future use. Why would the person not want to carry it forward? Is this simply a a good gesture of tossing the parents a bone? I mean, if my gf is paying for her own school and not living at home, is there any reason not to carry it forward?

Thank you for the help!


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## NorthKC (Apr 1, 2013)

Many times, parents will take the refund that they get from the tuition credits and give it to the kids to help pay for next year's tuition. That was how my tuition was paid for 4 years which helped ease the burden and stretch out the savings. As the students generally don't make a lot of money, they can't benefit it from this as much. 

Remember, it's still the student's choice to transfer to the parents.


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## atrp2biz (Sep 22, 2010)

Time value of money. Carrying a credit forward loses real value (although nominally stays the same). It is optimal to use the credit as soon as possible. Perhaps via an implicit agreement, your gf can transfer the credits to a parent and the parent can give her the value of the credit.


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## atrp2biz (Sep 22, 2010)

NorthKC said:


> As the students generally don't make a lot of money, they can't benefit it from this as much.


Remember--these are tax credits, not a deduction.


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## gibor365 (Apr 1, 2011)

> if my gf is paying for her own school and not living at home, is there any reason not to carry it forward?


If she is not living at home at all and pays for her own school and didn't use RESP parents contributed in . than maybe she shouldn't transfer tuitions


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## cutchemist42 (Oct 15, 2012)

gibor said:


> If she is not living at home at all and pays for her own school and didn't use RESP parents contributed in . than maybe she shouldn't transfer tuitions


Yeah, she is going on her scholarship and government loan.


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## MrMatt (Dec 21, 2011)

Get money now. 
I transferred my credits, my parents claimed them and paid me the amount they were worth.


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## cutchemist42 (Oct 15, 2012)

So when a parent keeps the money though from the credit, is it wrong then? Or does the scenario matter?


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## Spudd (Oct 11, 2011)

It's not wrong, that parent paid for supporting the kid all those years. It's up to the individual family how they want to handle it.


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## NorthKC (Apr 1, 2013)

atrp2biz said:


> Remember--these are tax credits, not a deduction.


I never said it was a deduction, just a credit. Hence why I said that students generally don't make enough money in the year to take full benefit meaning minimal taxes payable to have maximum tuition credits applied against it.


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## gibor365 (Apr 1, 2011)

Spudd said:


> It's not wrong, that parent paid for supporting the kid all those years. It's up to the individual family how they want to handle it.


Exactly! We literally spend tens of thousands $ only for sport activities our kids attended/attending, another thousands on abroad vacations and maxed their RESP. Thus our son transferring his tuitions w/o any complaints  



> Get money now


 also true. usually parents have much higher income that kid gonna have after University


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## gibor365 (Apr 1, 2011)

cutchemist42 , looks like you don't want that your GF will be transferring her tuition.... it's a dangerous game with in-laws on your side


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## atrp2biz (Sep 22, 2010)

Ok. That's not quite what you said in your first post, but I'm glad we're on the same page.


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## atrp2biz (Sep 22, 2010)

gibor said:


> Exactly! We literally spend tens of thousands $ only for sport activities our kids attended/attending, another thousands on abroad vacations and maxed their RESP. Thus our son transferring his tuitions w/o any complaints


Those are the costs of being a parent. If my child obtained a scholarship and paid for his/her own tuition, I would gladly monetize the credits for them and transfer the money. This also ensures the alignment of incentives to drive towards a scholarship and self-sufficiency.


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## gibor365 (Apr 1, 2011)

> If my child obtained a scholarship and paid for his/her own tuition


 scholarship for good universities is nothing... my son got $500 or so , not even comparable with tuitions....
Yes, he paid for tuitions, but with RESP money


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## cutchemist42 (Oct 15, 2012)

gibor said:


> cutchemist42 , looks like you don't want that your GF will be transferring her tuition.... it's a dangerous game with in-laws on your side


No its her that is questioning it. She asked the question and I never understood the reasoning as my situation is different from hers. I transferred to my parents but they paid for my schooling so I never questioned it.

She's doing her taxes tommorow, and she knows I post here and asked me to ask. Im going to be showing her the whole thread when she gets to it.


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## gibor365 (Apr 1, 2011)

oic , it's opposite  . it's very difficult to give advise w/o knowing her relationship with parents


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