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: Can an individual enrolled in a university outside Canada claim either the full-time or part-time education tax credit, depending on the circumstances?
Position: Yes
Reasons: There is nothing in the legislation that would prevent either the full-time or the part-time claim, provided the individual was in fact enrolled at the university either on a full time or part-time basis and met the provisions of the Act with respect to a "qualifying educational program" or a "specified educational program" respectively.
December 7, 2005
HEADQUARTERS HEADQUARTERS
Non-Resident Operations Division Income Tax Rulings
International Tax Directorate Directorate
Kimberly Duval
Attention: Brigitte Brassard 599-6054
2005-015783
Foreign University and the education Tax Credit
This is in response to your e-mail correspondence of November 7, 2005, requesting clarification on our position with respect to individuals enrolled at a foreign university and whether they are entitled to claim either the full-time or part-time education tax credit, depending on their particular circumstances. Specifically, you have us to confirm that students who are enrolled in a distance-learning program with a university outside of Canada are, in fact, eligible to claim the full-time or part-time education amount, dependant on their enrolment status, for purposes of claiming the education tax credit under subsection 118.6(2) of the Income Tax Act (the "Act").
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 and is computed based on the number of months enrolled in the program. As you are no doubt aware, the expressions "qualifying educational program", "specified educational program" and "designated educational institution" are all defined terms in subsection 118.6(1) of the Act. Specifically, a "designated educational institution" includes a university outside Canada at which an individual was enrolled in a course of not less than 13 consecutive weeks duration, leading to a degree.
If the student is enrolled in a qualifying educational program as a full-time student at a foreign university that is a designated educational institution, the student may be entitled to the full-time education tax credit of $400 for each month during which the student was so enrolled, times the appropriate percentage (currently 16%). The expression "enrolled in a qualifying education program as a full-time student" is not defined in the Act and as such, the requirement for enrolment as a full-time student at the foreign university must ultimately be met on the basis of the facts of each case and can be met by a student taking courses by correspondence or by a student enrolled in a distance education program. Generally, we would 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" would also result in the student meeting the educational institution's requirements for full-time enrolment; however, these tests remain distinct and are not necessarily the same. For example, in certain instances, institutions will establish full-time enrolment based on a minimum amount of credits, whereas a qualifying educational program requires a minimum amount of hours that may include both lecturing time and a reasonable estimate of time for work assignments. Therefore, there may be instances where although the requirements of a "qualifying educational program" have been satisfied, the student is not considered enrolled on a full-time basis for purposes of the claiming the full-time education tax credit.
In these circumstances, the individual may still qualify for the part-time education tax credit provided the individual is enrolled in a specified educational program where each student in the program spends 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 are met, the individual may be entitled to the part-time education tax credit of $120 for each month during which the student was so enrolled, times the appropriate percentage (currently 16%). Again, this requirement can be met by a student taking courses in person, by correspondence or by enrolment in a distance education program at the designated educational institution and we would generally rely on the institution's determination in this regard.
We trust that these comments will be of assistance.
For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the electronic library version, or they may request a severed copy using the Privacy Act criteria, which does not remove client identity. You should make requests for this latter version to Mrs. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
John Oulton, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Policy and Planning Branch
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