By Astoria Luzzi
I don’t usually get anything in the mail, but when I do it seems to always be from the Ontario government. This past week I got an unexpected phone call from my mother telling me that yet again the mail gods had delivered me a letter from the high and mighty. I expected it to be a tax return with a decent cheque attached, but to my horror, that was not the case.
Audited. A word I never thought I would hear, especially as an undergraduate student who has no steady income and does not own property. Yet the Canada Revenue Agency (CRA) has subjected me to a random investigation and asked me to support my claim by providing rent receipts or cancelled rent cheques, the addresses of my residences, reciepts for tuition, textbooks and education fees. Apparently “random” means that a few of my peers who also lived in residence for part of 2011 have been audited for their tuition and rent claims as well.
Luckily I have never had to do my own Income Tax and Benefit Return so I had no idea how to deal with being audited, but I was interested enough to find out how the process worked. At first glance the General Income Tax and Benefit Guide is a lot of bullet-pointed lists and fill-in-theblanks, and took me a few reads to understand.
The actual process of trying to understand if you’re eligible for each section, and then totalling the exact amount by looking at receipts for the past year, is a task too tedious to do myself.
In order to complete an audit properly I was told I would have to revisit my residence and past rental unit and request receipts of the amounts I paid. I stopped by Pitman Hall residence, where I lived back in Winter 2011, to speak to Chad Nuttall, manager of Ryerson Student Housing Services. Apparently I wasn’t the first student to do so. “People call and say ‘can we get a receipt for residence?’ but we don’t issue tax receipts because it is not deductible.”
I was taken aback by Nuttall’s answer as to how I would go about proving how much I paid for residence back in first-year. Nuttall directed me to the Income Tax Receipts page on the Student Housing Services section of Ryerson’s website. Finally, something written in a way I could understand. The jist of it is that Ryerson’s residences are “designated for property tax and rent purposes,” therefore students cannot claim residence fees on their income tax returns. But for some reason living in a “designated Ontario university residence” allows us to claim $25 under the Ontario Energy and Property Tax Credit (OEPTC) without proof of a receipt.
So I pay roughly $9,475 for residence in first-year and get a $25 cheque back as a tax credit? That seems really fair, doesn’t it? I decided to call up the CRA and find out what tax returns you can claim for rental units. Keith Brooks, manager of communications for the Ontario region of the CRA, was very helpful and a lot easier to understand than the jargon I had spent hours reading online.
“What kind of credit you will get for your rent is determined by the province,” says Brooks, who then directed me to a page on the CRA website that he said “may” be of some help to me. It seems like I wasn’t the only person confused about what parts of my residence or rent could or could not be claimed.
Brooks said I may be qualified for the OEPTC if I fall within the criteria. After deciphering the ifs, ands or buts of the criteria, it turns out I am eligible because I no longer live in a designated residence, and should include it in my future claims.
Now knowing that I could not claim my residence costs, the next step would be to contact the landlord of my previous apartment that I lived in during second year, and request a letter or receipt showing how much I paid in total. Through the process of gathering proof for my audit, I learned more than I thought I would about filing tax returns. I wouldn’t say I learned enough to start doing it myself, but I definitely will appreciate it a lot more now that I know I don’t have to go through this process each fiscal year.
I still don’t understand why the CRA would come after full-time students that probably have no money left after paying for residence and tuition, when they could be getting so much more out of auditing people who actually have a steady income and pay more taxes.
Either way, after the process, the only letters from the government I will be looking forward to from now on are my tax credit cheques.