Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether a particular student taking XXXXXXXXXX qualifies for the tuition tax credit and the education tax credit.
Position TAKEN:
It appears that the student qualifies for the tuition tax credit, but not the education tax credit.
Reasons FOR POSITION TAKEN:
Based on the facts provided, it appears that the student meets the requirements of section 118.5 for claiming the tuition tax credit. As regards the education tax credit, it is our understanding that the student is employed in the accounting field, such that she does not meet the requirements of paragraph (b) of the definition of “qualifying educational program” in subsection 118.6(1) and, consequently, the requirements of the proposed definition of “specified educational program”.
XXXXXXXXXX 5-991028
M. Azzi
June 9, 1999
Dear Madam:
Re: Tuition and Education Tax Credits
This is in reply to your letter of April 6, 1999, wherein you requested our views on whether you are entitled to the tuition tax credit and the education tax credit in respect of your enrolment in courses of XXXXXXXXXX.
You indicate that, in XXXXXXXXXX students have a choice of taking the courses of the XXXXXXXXXX by correspondence through XXXXXXXXXX, or enrolling in a “XXXXXXXXXX” course at the XXXXXXXXXX, and writing a final exam with XXXXXXXXXX. The duration of each course is 12 weeks, with students committing to 15 to 20 hours per week to their studies, regardless of where they take the course. We understand that you are employed in the XXXXXXXXXX taking the XXXXXXXXXX courses at the XXXXXXXXXX, and you are not reimbursed by your employer for your XXXXXXXXXX courses. We assume that the XXXXXXXXXX is a post-secondary educational institution described in subparagraph 118.5(1)(a)(i) of the Income Tax Act (the “Act”) and in subparagraph (a)(i) of the definition of “designated educational institution” in subsection 118.6(1) of the Act.
The determination of whether an individual qualifies for the tuition tax credit provided in section 118.5 of the Act, or the education tax credit in section 118.6 of the Act, requires a review of all relevant facts of a particular situation. Such a review is normally conducted by officials of your local Tax Services Office, who are in a better position to appreciate all the circumstances of a particular case. We are, however, prepared to provide the following comments which should be of assistance. Reference should also be made to Interpretation Bulletin IT-515R2, Education Tax Credit, and IT-516R2, Tuition Tax Credit (copies enclosed), which provide the Department’s views on these credits.
In order for a student to be entitled to claim a tuition tax credit under section 118.5 of the Act, tuition fees must, inter alia, be paid to a university, college or other educational institution for courses that are at the post-secondary school level, except for certain courses at an educational institution certified by the Minister of Human Resources Development to be an educational institution providing courses (other than courses designed for university credit) that furnish a person with skills for, or improve a person's skills in, an occupation. Based on the information provided, it would appear that the tuition fees that you paid to the XXXXXXXXXX in respect of courses of the XXXXXXXXXX Program fall within the ambit of section 118.5 of the Act. Accordingly, it appears that you would be entitled to the tuition tax credit in respect of such fees, to the extent provided in section 118.5 of the Act.
Section 118.6 of the Act authorizes a student to claim an education tax credit for each month in the calendar year during which the student is enrolled in a qualifying educational program as a full-time student at a designated educational institution. The criteria required to be met in order for a program to qualify as a “qualifying educational program” are set out in subsection 118.6(1) of the Act (and explained in IT-515R2), but exclude any such program
“(b) if the program is taken by the student
(i) during a period in respect of which the student receives income from an office or employment, and
(ii) in connection with, or as part of the duties of, that office or employment.”
It is our view that the term “in connection with”, in (ii) above, has a broad meaning, such that it would apply to XXXXXXXXXX students who are employed in XXXXXXXXXX related field. Consequently, in light of the foregoing and our understanding of the XXXXXXXXXX Program, it is our view that students enrolled in courses of the XXXXXXXXXX Program would only qualify for the education credit in limited circumstances since such students are ordinarily employed in the XXXXXXXXXX field. As it is our understanding that you are employed in the XXXXXXXXXX field, you cannot, in our view, be entitled to the education tax credit in respect of your enrolment in the courses of the XXXXXXXXXX Program.
It should also be noted that Bill C-72, which received first reading on March 16, 1999, contains proposed legislation that will entitle part-time students to an education tax credit in certain circumstances. Under proposed subsection 118.6(2) of the Act, for 1998 and subsequent taxation years, a student can claim an education tax credit of $60 per month, multiplied by the appropriate percentage (17%), if the student was enrolled part-time at a designated educational institution in a “specified educational program”. As proposed in subsection 118.6(1), a “specified educational program” is a program that would be a “qualifying educational program”, except that the requirement that a student enrolled in the program spend not less than 10 hours per week on courses or work is removed. As a result, the requirements of paragraph (b) of the definition of “qualifying educational program” also apply to the proposed definition of “specified educational program” in subsection 118.6(1), such that our above comments with respect to the term “in connection with” would also apply to part-time students. In addition, paragraph (b) of variable B in proposed subsection 118.6(2) of the Act adds a requirement, with respect to the credit for part-time students, that a student spend not less than 12 hours per month on courses in the program.
We trust that these comments will be of assistance.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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