Zhang – Tax Court of Canada finds that “may deduct” means “is permitted to deduct” rather than “chooses to deduct”

The formula for an individual’s unused tuition, textbook and education tax credits states that it is reduced each year by “the amount that the individual may deduct” for that year. Graham J found that this was referring to “the amount that the individual is permitted to deduct” for the year, irrespective whether or not she wants to do so, rather than to “the amount that the individual chooses to deduct” for the year. The effect of this was that the taxpayer could not defer claiming the credits until a later year when they were of more use to her.

Neal Armstrong. Summary of Zhang v. The Queen, 2017 TCC 258 under s. 118.61(1).