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: Application of education tax credit where student is working full-time in the field.
Position: The education tax credit is generally available in this situation where all other criteria are met.
Reasons: The March 2004 budget eliminated the exclusion for courses taken while an individual is employed and the course is taken in connection with that employment.
2007-022762
XXXXXXXXXX Eliza Erskine
(613) 274-3022
April 4, 2007
Dear XXXXXXXXXX:
Re: Education Tax Credit While Pursuing Directed Field Studies ("DFS")
We are writing in reply to your email correspondence of March 15, 2007, regarding the above-noted subject matter. We also acknowledge our telephone conversation with you of March 30, 2007 (Erskine/XXXXXXXXXX).
Written confirmation of the tax consequences relating to a particular transaction or series of transactions are 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 70-6R5, Advance Income Tax Rulings. Therefore, we cannot provide you with an interpretation confirming your entitlement to the Education Tax Credit (the "ETC") for the period between September and December of 2006 as requested in your email correspondence. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.
Subsection 118.6(2) of the Income Tax Act (the "Act") authorizes an ETC for the period in which a particular student is enrolled in a "qualifying educational program" as a full-time student at a "designated educational institution". A part-time student may also be eligible for the ETC if he or she is enrolled in a "specified educational program". These terms are defined in subsection 118.6(1) of the Act and are explained in more detail in Interpretation Bulletin IT-515R2, Education Tax Credit (the "Bulletin"), which is available on the Canada Revenue Agency website at www.cra-arc.gc.ca .
We understand from your email correspondence that the DFS portion of your program involves working full-time in your field while continuing to take courses with XXXXXXXXXX. In this regard, we note that for years prior to 2004, the definition of "qualifying educational program" in the Act excluded any program taken by a student:
(a) during a period for which the student received income from an office or employment, and
(b) in connection with, or as part of the duties of, that office or employment.
However, the federal budget of March 2004 removed the exclusion for the 2004 and subsequent tax years. This means that, provided all other requirements are met, a course or program taken by an individual after 2003 in connection with his or her employment is eligible for the ETC. Moreover, those portions of the Bulletin dealing with the repealed exclusion (paragraphs 17 to 22), are not applicable for tax years after 2003.
As noted above, we are unable to confirm whether or not you qualify for the ETC with respect to the DFS portion of your studies. The determination of whether or not a student is entitled to a certain number of months on a full-time or part-time basis for purposes of the ETC is generally the responsibility of the particular educational institution. Therefore, you may wish to contact XXXXXXXXXX and request that it reconsider its decision with respect to your DFS studies in light of the comments provided in this letter.
We hope that our comments will be of assistance to you.
Yours truly,
Mickey Sarazin, CA
Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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