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: Whether a student is eligible for the LLP when enrolled part-time in a Master degree program that will require more than 10 hours of class and work per week.
Position: Question of fact
Reasons: The student must be enrolled in a qualifying educational program at a designated educational institution as a full-time student. Even if the student is enrolled in a program that requires spending ten hours or more per week, the student would not be eligible for the LLP if the institution considers the student to be a part-time student.
November 26, 2009
Dear XXXXXXXXXX :
Re : Lifelong Learning Plan
This is in response to your letter of May 5, 2009 asking that we allow you to participate in the Lifelong Learning Plan (LLP). You are a student enrolled at the XXXXXXXXXX to complete a Master degree in Project Management. The program will require more than ten hours of class and work per week and is designed for professionals with full-time careers.
The particular situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. 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, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. We are, however, prepared to offer the following general comments, which may be of assistance.
All statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended ("Act").
The LLP allows an individual to withdraw an "eligible amount" as defined in subsection 146.02(1) from their registered retirement savings plans ("RRSPs") to finance full-time training or education of the individual or their spouse or common-law partner.
In order to qualify as an "eligible amount" within the meaning assigned by subsection 146.02(1), the designated person (the student attending school) has to be enrolled at the particular time as a full-time student in a qualifying educational program or has to receive written notification before the particular time that the designated person is absolutely or contingently entitled to enroll before March of the following year as a full-time student in a qualifying educational program. Thus, both requirements that the student be a "full-time student" and that the student be enrolled in a "qualifying education program" must be satisfied.
In general, a "qualifying educational program" is defined in subsection 146.02(1) as an educational program at a designated educational institution that lasts for a period of not less than three consecutive months and requires that the student spend not less than ten hours per week on course or work in the program.
The term "full-time student" is not defined for purposes of the LLP except to extend it to include mentally or physically impaired students enrolled on a part-time basis by reference to subsection 118.6(3). Pursuant to the subsection 118.6(3), a part-time student will qualify if the student is eligible for the disability tax credit or the student cannot reasonable be expected to be enrolled on a full-time basis because of the student's mental or physical impairment, as certified in writing by a practitioner listed in paragraph 118.6(3)(b).
Paragraphs 5 to 7 of Interpretation Bulletin IT-515R2, Tuition Tax Credit provide general comments regarding our interpretation of "full-time student". It is our position that it is the responsibility of the educational institution to determine whether or not the student is considered to be a full-time student. Even if the student is enrolled in a program that requires spending ten hours or more per week, the student would not be eligible for the LLP if the institution considers the student to be a part-time student.
Please note that the provisions of the Act dictate our conclusions. The role of the Canada Revenue Agency ("CRA") is to administer and enforce the Act as passed by Parliament. The CRA strives to carry out this role fairly and uniformly for all taxpayers. In our view, a legislative amendment to LLP provisions would be required to enable part-time students to participate in the LLP. Amendments to the Act are the responsibility of the Department of Finance. Should you wish to pursue your concerns further, you may write to the officials in the Tax Policy Branch at the Department of Finance, L'Esplanade Laurier, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.
We trust that the above comments will be of assistance to you.
Louise J. Roy, CGA
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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