24 February 2000 Internal T.I. 1999-0007447 - CGA COURSES AND LIFELONG LEARNING PLAN

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 CGA courses will qualify for purposes of the Lifelong Leaning Program

Position: Yes given the facts of this particular case if the CGA association is HRDC certified.

Reasons: Requirements of section 146.02 met

				February 24, 2000

	XXXXXXXXXX  TSO		HEADQUARTERS
	Client Services		Income Tax Rulings
				  Directorate
	Attention:  XXXXXXXXXX 		S.E. Thomson
(613) 952-9853

				1999-000744

CGA Courses and the Lifelong Learning Plan

This is in reply to your e-mail request of November 15, 1999, in which you ask several questions regarding the Certified General Accountants (CGA) program as it relates to the Lifelong Learning Plan (LLP).

We understand that the regular CGA program consists of three sessions per year during which a student normally takes one course per session. For each course, the student submits one assignment per week for 10 weeks, then writes an exam approximately 2-3 weeks after the last assignment. Courses may be taken by lecture or by correspondence, and students are expected to spend approximately 20 hours per week on each course. Generally, students are employed in the accounting or a related field during their studies. The CGA designation is earned after a program of study lasting at least 5 years, although advanced standing may be granted for courses completed in certain other educational programs.

The taxpayer in question will take a year off from her work, and take one course in each of the three sessions, all by correspondence, with a 3-month summer break. She'd like to know if this will qualify under the LLP. Her employer may reimburse her for the tuition fees.

Pursuant to the definition of "eligible amount" in subsection 146.02(1) of the Income Tax Act (the "Act"), a taxpayer may withdraw an amount tax-free from her RRSP under the LLP if, among other things and in accordance with paragraph (f) of that definition, she or her spouse is, at the time of withdrawal, enrolled as a full-time student in a qualifying educational program or has received notice that she or her spouse is entitled to enroll as such before March of the following year.

The LLP provisions define a "qualifying educational program" to be a "qualifying educational program" at a "designated educational institution", as those terms are defined in subsection 118.6(1) of the Act. Also, a program will qualify only if it is a program of not less than 3 consecutive months duration. Note that neither paragraph 118.6(1)(a) nor 118.6(1)(b) of the definition "qualifying educational program" (regarding, respectively, allowances and employment) apply to the LLP.

A "qualifying educational program" as defined in subsection 118.6(1) of the Act requires that the student spend not less than 10 hours per week on courses or work in the program. A student who is in regular attendance in a qualifying educational program is considered to be enrolled as a full-time student. For more information on these issues, please refer to IT-515R2 "Education Tax Credit" (in particular paragraphs 10 and 11 concerning a "qualifying educational program" and paragraphs 5 and 6 concerning "full-time" enrollment).

Each Canada Customs and Revenue Agency (CCRA) tax services office has an updated list of institutions which have been certified by the Minister of Human Resources Development Canada (HRDC) as a "designated educational institution". We have confirmed that several provincial CGA associations are on the HRDC list, and as such are designated educational institutions. With respect to the situation you are reviewing, please verify that the CGA association in question is on the HRDC list located at your office.

Since regular attendance in the CGA program is one course per session, a student will be considered full-time where she is enrolled in at least one CGA course in a session. Assuming the CGA association is certified by the Minister of HRDC, the CGA program will be a qualifying educational program for purposes of the LLP where the student spends a minimum of 10 hours per week on each course, and the program is a least 3 consecutive months in duration. Where the student is enrolled in only one course, the student may not qualify for the LLP since one course may be less than 3 consecutive months in duration. Please refer to paragraph 9 of IT-497R3 Overseas Employment Tax Credit for the CCRA's interpretation of "consecutive months".

There is nothing in the LLP provisions which requires the RRSP withdrawal to be applied to payment for the qualifying educational program, nor is there any provision to prevent the employer from reimbursing the student's expenses.

Pursuant to paragraph (h) of the definition of "eligible amount" in subsection 146.02(1) of the Act, after the withdrawal of the amount the student must be enrolled as a full-time student in the program before March of the year following the year of withdrawal and, in addition:

(i) must complete the program by April of the year following the year of withdrawal,

(ii) must continue to be enrolled in the program up to and including March 31 of the year following the year of withdrawal, or

(iii) less than 75% of the tuition paid after January 1 of the year in which the amount was withdrawn and before April of the year following the year of withdrawal is refundable.

We trust the foregoing comments will be of assistance.

P. Spice
for Director
Financial Industries Division
Income Tax Rulings Directorate