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: Availability of Tuition Tax Credit and Education Tax Credit for apprenticeship fees
Position: Question of Fact
Reasons: Eligibility for the tax credits depends on the institution, the course and the individual. Inquiry too general.
2002-015834
XXXXXXXXXX R. Shields
(613) 948-5273
October 25, 2002
Dear XXXXXXXXXX:
Re: Tuition Tax Credit and Education Tax Credit for Apprenticeship Fees
This is in response to your letter of August 9, 2002 inquiring about the availability of the tuition tax credit described in subsection 118.5(1) of the Income Tax Act (the "Act") and the education tax credit described in subsection 118.6(2) of the Act for fees paid for apprenticeship classroom training.
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 income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.
The CCRA's general views in respect of the tuition tax credit and the education tax credit are found in Interpretation Bulletin IT-516R2, Tuition Tax Credit and Interpretation Bulletin IT-515R2, Education Tax Credit.
The tuition tax credit is available for tuition fees paid to a university, college or other educational institution providing courses at the post-secondary level. In addition, certain courses at an educational institution certified by the Minister of Human Resources Development to be an educational institution providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person's skills in, an occupation are also eligible for the credit.
As indicated in paragraph 3 of IT-516R2, there is no all-inclusive list of educational institutions in Canada providing courses at a post-secondary school level. The tax services office located in the same area as the institution is best able to make this determination. Generally speaking however, unless there is specific information to the contrary, an educational institution whose name includes the words "university" or "college" is usually eligible.
Please note that even though the institution may be eligible, the course for which the fee is paid must also be considered to be post-secondary pursuant to the requirement in subparagraph 118.5(1)(a)(ii.1) of the Act. The Ministry of Education in each province is responsible for defining what constitutes a post-secondary level course. We are not in a position to determine whether all courses for which the Province of Ontario would levy apprenticeship classroom training fees would be considered to be at a post-secondary level and therefore cannot comment on whether all such fees paid would qualify for the tuition tax credit.
CCRA tax services offices have updated lists of Canadian educational institutions certified by the Minister of Human Resources Development pursuant to subparagraph 118.5(1)(a)(ii). If the tuition fees relate to a course offered by such a certified institution, paragraph 8 of IT-516R2 discusses the CCRA's views on the factors relevant in determining whether a course qualifies for the tuition tax credit.
Finally, as paragraph 8 of IT-516R2 also indicates, certain individuals may not be eligible for the tuition tax credit if the tuition fee is paid by his or her employer and not included in the student's income or in certain situations involving allowances, reimbursements or assistance.
You have also asked whether unemployed apprentices attending apprenticeship classroom training would be eligible for the education tax credit. An education tax credit is available for students enrolled in a qualifying educational program as a full-time student or in a specified educational program as a part-time student at a designated educational institution.
To be a "qualifying educational program", a program must run at least three consecutive weeks and must require instruction or work in the program of at least ten hours a week throughout its duration. Further, the student may not be in receipt of income from an office or employment if attending the program in connection with or as part of the duties of that office or employment.
Because your question referred to "unemployed" apprentices, we should point out that in instances in which an apprentice is laid off by an employer to attend training, the individual is generally not eligible for the education credit. Many such individuals receive ongoing income support through employment insurance benefits, which are considered "allowances" for the purpose of the definition of "qualifying educational program" in subsection 118.6(1). As a result, they are prohibited from receiving additional assistance through the education tax credit.
A designated educational institution is one which satisfies either subparagraph 118.6(1)(a)(i) or subparagraph 118.6(1)(a)(ii) of the Act. The former specifies that the institution must be designated by any of several bodies under their respective legislative authority. The latter requires the institution to be certified by the Minister of Human Resources Development to be an educational institution providing courses that furnish a person with skills for, or improve a person's skills in, an occupation. Your inquiry did not relate to a specific institution so we are unable to comment on this element.
While the terms "designated educational institution" and "qualifying educational program" are defined in the Act, the term "enrolled...as a full-time student" is not. However, paragraphs 5 to 7 of IT-515R2 provide general comments regarding the CCRA's interpretation of this term. 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. Thus, the CCRA must generally rely on the institution's determination as to whether an individual is registered as a full-time student.
To qualify for the part-time education tax credit pursuant to paragraph (b) of variable B of subsection 118.6(2) of the Act, a student must be enrolled at a designated educational institution 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" is a qualifying educational program (described above) with the 10 hours per week reference removed. Accordingly, it will be a question of fact whether a particular course qualifies for the credit.
It should also be noted that the credit is not available to a student who receives any allowance, benefit, grant or reimbursement for expenses (other than as a scholarship, fellowship or bursary, prize for achievement in a field of endeavour ordinarily carried on by the student or loan granted in accordance with the Canada Student Loans Act or Student Loans and Scholarships Act of the Province of Quebec) from a person with whom the student is dealing at arm's length.
We trust that these comments will be of assistance.
Yours truly,
Mickey Sarazin, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2002
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2002
Email this Content