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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Whether program offered by the School is a "qualifying educational program" or "specified educational program".
Position: Question of Fact
Reasons: Based on prior positions.
XXXXXXXXXX 2002-014263
Cornelis Rystenbil, CGA
July 24, 2002
Dear XXXXXXXXXX:
Re: Qualifying Education Program
This is in reply to your letter of May 21, 2002, requesting a technical interpretation on the issuance of the Education Tax Credit certificates to students enrolled in your regular and correspondence education programs.
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject of an advance income tax ruling request submitted in a manner set out in Information Circular 70-6R5. As stated in paragraph 22 of Information Circular 70-6R5, written opinions are not advance tax rulings and, accordingly, are not binding on the Agency. The following comments are, therefore, of a general nature only.
The Canada Customs and Revenue Agency's (CCRA) general interpretation of the provisions of the Income Tax Act (the "Act") that apply to qualifying education programs is contained in Interpretation Bulletin IT-515R2, Education Tax Credit.
Generally, the education tax credit is available in respect of regular and correspondence education programs for students who are otherwise enrolled in qualifying or specified educational programs at designated educational institutions in Canada and is computed based on the number of months enrolled in the program. Accordingly, a "designated educational institution" may issue a T2202 or a T2202A to a full-time student enrolled in a "qualifying educational program" or to a part-time student enrolled in a "specified educational program". The expressions "qualifying educational program", "specified educational program" and "designated educational institution" are defined in subsection 118.6(1) of the Act.
If the student is enrolled in a qualifying educational program as a full-time student at a designated educational institution, the student may be entitled to an education tax credit of $400 for each month during which the student was so enrolled, times the appropriate percentage (currently 17%). The expression "enrolled in a qualifying education program as a full-time student" is not defined in the Act. However, paragraphs 5 to 7 of IT-515R2 provide general comments regarding the CCRA's interpretation of this expression. As indicated in paragraph 5 of IT-515R2, the requirement for enrolment as a full-time student at a designated educational institution must ultimately be met on the basis of the facts of each case. This requirement can be met by a student taking courses at the designated educational institution or by correspondence or by a person enrolled in a distance education program. The CCRA must generally rely on the institution's determination as to whether an individual is registered as a full-time student.
The term "qualifying educational program" requires, in part, that the program run for at least 3 consecutive weeks and must provide that each student taking the program spend at least 10 hours per week on courses or work in the program. While in many instances meeting the minimum requirements of a "qualifying educational program" may result in the student also meeting the educational institution's requirements for full-time enrolment, these 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 qualifying educational program requires a minimum amount of hours that, as indicated in paragraph 11 of IT-515R2, may include both lecturing time and a reasonable estimate of time for work assignments or other items listed in paragraph 11 of the bulletin. In our view, the term "work assignments" would generally include written case studies if they are an integral part of the course.
Where the student is enrolled at a designated educational institution but does not qualify as a full-time student, the individual may still qualify for the part-time education tax credit. To qualify, the individual must be enrolled in a specified educational program that provides that each student in the program spend not less than 12 hours in the month on courses in the program. A "specified educational program" means a program that would be a "qualifying education program" if that term were read without reference to the "10 hours per week" test. If the above criteria is met, the individual may be entitled to an education tax credit of $120 for each month during which the student was so enrolled, times the appropriate percentage (currently 17%). Again, this requirement can be met by a student taking courses at the designated educational institution or by correspondence or by a person enrolled in a distance education program.
We trust that these comments will be of assistance.
Yours truly,
Mickey Sarazin, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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