12 September 2001 External T.I. 2001-0092785 - TUITION-13 CONSECUTIVE WEEKS

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:

1. What is the intent of the 13 consecutive week requirement under 118.5(1)(b)?

2. Can the Canadian students avail themselves of the tuition tax credit ?

POSITION TAKEN:

1. Course duration not less than 13 consecutive weeks.

2. If the US University is located at a commuting distance and the student living near the border commutes to the US University.

Reasons FOR POSITION TAKEN:

Prior Positions

XXXXXXXXXX 2001-009278
C. Tremblay, CMA
September 12, 2001

Dear XXXXXXXXXX:

Re: Tuition fees and 13 consecutive weeks

This is in reply to your letter of July 2, 2001, wherein you asked the intent of the requirement that a course be 13 consecutive weeks in duration as it relates to the tuition tax credit pursuant to paragraph 118.5(1)(b) of the Income Tax Act (the "Act").

You informed us that the undergraduate classes at XXXXXXXXXX meet for ten consecutive weeks, and the eleventh week is for final examinations. The twelfth week is typically a break, and then a new term begins.

Our Comments:

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. However, we are prepared to offer the following general comments.

Generally, an individual who is, during the year, a student in full-time attendance at a university outside Canada in a course leading to a degree at not lower than the bachelor or equivalent level may claim a tuition tax credit for any tuition fees paid for the year to that university, pursuant to paragraph 118.5(1)(b) of the Act, provided that the fees are for a course of not less than 13 consecutive weeks duration.

In the situation you describe, the XXXXXXXXXX program leads to a degree at its successful conclusion and its' Canadian students are in full-time attendance. However, the courses are not at least 13 consecutive weeks in duration and thus the tuition paid in respect of these courses would not be eligible for the tax credit.

The only exception to the requirement in respect of a course of less than 13 consecutive weeks duration is for students residing throughout the year in Canada near the boundary between Canada and the United States and who were enrolled in and commuted to the educational institution in the United States. Paragraph 118.5(1)(c) of the Act provides a tuition credit for those students for any tuition fees paid for the year to that educational institution, as long as the total of such fees exceeds $100. Generally, a university in the United States, which is within daily commuting distance of Canada, is presumed to be an institution that qualifies for purposes of paragraph 118.5(1)(c) of the Act.

We trust our comments are of assistance.

Yours truly,

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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