27 March 1998 Internal T.I. E9805567 - QUALIFYING EDUCATIONAL PROGRAM

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 regular EI benefits disqualify students for the education tax credit.

Position:

No.

Reasons:

Regular EI benefits are not "allowance, benefit, grant or reimbursement for expenses in respect of the program."

Note: Spoke to an Employment Insurance Officer (990-5111) who explained the three alternatives: 1) regular benefits, with no reimbursement; 2) partial reimbursement; and, 3) full reimbursement.

		March 27, 1998

	Charlottetown Tax Services	HEADQUARTERS
	Client Services Division	A.M. Brake
(613) 957-8953
	Sharron Bulger

		980556

Qualifying Educational Program, Section 118.6

This is in reply to your memorandum of March 4, 1998 relating to a situation where individuals were full-time students who paid their own tuition but received only regular benefits under the Employment Insurance Act (regular EI benefits) for which they otherwise qualified while they attended a designated educational institution. The individuals attended school under the "feepayer program" and received no special extension of EI benefits. No other benefits or allowances were paid to these students. The regular EI benefits are required to be included in income pursuant to subparagraph 56(1)(a)(iv) of the Income Tax Act (the "Act"). You asked whether the regular EI benefits fall under the definition of "qualifying educational program" in section 118.6 of the Act, being an "allowance, benefit, grant or reimbursement for expenses in respect of the program," thereby preventing these students from claiming the education tax credit.

It is our view that under the circumstances described above, the regular EI benefits would not fall within the ambit of being an "allowance, benefit, grant or reimbursement for expenses in respect of the program." We might mention, however, that there is a program where, in addition to regular EI benefits being paid to the student, a portion of the tuition fees are paid and under another program, the entire amount is paid to or on behalf of the student. Under those two latter situations where a part or all of the tuition is paid for the student under the EI program, these students would not qualify for the education tax credit.

Jim Wilson
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch