TAXATION OF STUDENTS.
Take an average full-time student in a University in Montreal – during the summer weekends he earns approximately $10,880 in 2011.
He has no Federal or Quebec tax to pay. He is not obliged to contribute to either the Quebec prescription drug insurance or health contribution of $100.
Therefore all amounts of tax withheld on his paychecks are reimbursed but he does pay QPP (Quebec’s pension fund) $365, and $153 for the Employment Insurance Plan and Provincial Parental Insurance of $58.
His tuition for 2011 is $2,564.35
He is entitled to a 15% federal credit of $384.65 and a provincial credit of 20% for expenses during the school year of $521.87
The percentage is the same for any student regardless of income level. If the student does not use these funds now, he can transfer them to his parents or postpone them indefinitely, until at such time he has a tax liability.
Federally there is an education credit amount based on the number of months in full or part time studies. In this case it is 8 months, full time.
8 months X $ 400 = $3,200 X 15% = a savings of $ 480.00
The following credit is for textbooks:
8 months X $65 = $520 X 15 = a savings of 78.00%
So after tax, the net tuition of our student so far will be $ 1,108.93 for 2011.
Much less impressive than what we see on TV.
But it’s not over, because as he worked, even if he is considered low income, the Quebec provincial government contributes a refundable credit for the work premium.
With his income he receives $ 10,880 minus the $510.87 in income taxes stated before, and using good judgment, he decides to apply the amount paid by Quebec’s incentives back into his education.
Our student need only now pay $597.96
But he is still entitled to other amounts – This is not a joke, I swear …..
He will receive during the next year’s credit a GST rebate of $309 and a credit for Solidarity of Quebec for $264
Again if he uses good judgment and applies it to the balance of his tuition, he comes up with a total balance of just $24.96 he is out of pocket for tuition.
As for his summer earnings of $10,880 less QPP, Employment Ass and PPIP (576) – $10,279 remains entirely in his pocket if he takes advantage of living at home rent free with his parents for the duration of his BACC (Bachelor Degree).
Factually, the increase of $325 per year after rebate is $ 211.25 with 35% of the credits.
After 5 years of school, a whopping $1,625 is the total cost for his education.
Reposted from Antonio Casolino on Facebook