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.
Principal Issues: Where there is a practicum, does the student qualify as full or part time for the ETC?
Position: Depends
Reasons: CRA generally relies on the institution's determination as to whether the individual is registered as a full-time student.
XXXXXXXXXX 2011-039887
George A. Robertson, CMA
December 14, 2011
Dear XXXXXXXXXX :
Re: Education Tax Credit (ETC) for Courses with Practicum
This is in response to your request of March 4 requesting our views on claiming the ETC under subsection 118.6(1) of the Income Tax Act (the Act).
The details as presented by you are:
- First term -January to April
- Enrolled in five courses, one of which is placement course
- Second term-May to August
- Enrolled in one class mid May to end of June
- Enrolled in two classes mid May to mid August
- Third term-September to December
- o Enrolled in one placement course September to December
Our comments:
Pursuant to subsection 118.6(2) of the Act, an individual's ETC is based on the number of months that the student is enrolled in a qualifying educational program (QEP) as a full-time student at a designated educational institution (DEI). A part-time student may also be eligible for the ETC if he or she is enrolled in a specified educational program (SEP). These terms are defined in subsection 118.6(1) of the Act.
A SEP means a program that would be a QEP if the definition of QEP were read without reference to the words "that provides that each student taking the program spend not less than 10 hours per week on courses or work in the program".
The term "enrolled...as a full-time student" is not defined in the Act. Paragraphs 5 to 7 of the Income Tax Interpretation Bulletin IT-515R2, Education Tax Credit (IT 515R2), provide general comments regarding the CRA's interpretation of this term. The IT 515R2 is available at CRA's web site, http://www.cra-arc.gc.ca/E/pub/tp/it515r2/it515r2-e.html .
As indicated in paragraph 5 of IT-515R2, the requirement for enrolment as a full-time student at a DEI must ultimately be met on the basis of the facts of each case. Paragraph 7 of IT 515R2 addresses co-operative courses. Both a practicum or internship placement is similar in nature to a co-operative placement.
The student is regarded as being enrolled as a full-time student only during those months in which the DEI is attended. Where a student is not considered to be enrolled as a full-time student, the student may be eligible for the part-time education tax credit if the program in which the student is enrolled meets the requirements of a SEP and the student spends not less than 12 hours per month on courses in the program. The CRA generally relies on the educational institution's determination as to whether the individual is registered as a full-time or part-time student if the method of classification is reasonable and consistent.
While in many instances, a student will be considered a full-time student for ETC purposes if the student's program is a QEP, the tests remain distinct and are not necessarily the same. For example, in certain instances, institutions establish full-time enrolment based on a minimum amount of credits, whereas a QEP requires a minimum amount of hours (10 hours per week), which may include both lecturing time and a reasonable estimate of time for work assignments. If the institution offering the program satisfies itself that it meets the definition of a DEI and the student is enrolled in a program that meets the 10 hours/week on courses or work in the program as required by the QEP criteria then the student would be considered full time. If the student is not considered to be full time by the DEI, the student may be eligible for the part time ETC if the student spends not less than 12 hours per month on courses in the program as required by the SEP criteria.
Eligibility for the ETC is determined on a case-by-case basis. An individual must satisfy all the conditions of subsection 118.6(2) in order to qualify. The CRA can only determine whether an individual has met these requirements after the individual's specific fact situation is reviewed.
Yours truly,
Sharmini Ratnasingham
Assistant Director
Financial Industries Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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