8 August 2013 Internal T.I. 2013-0483291I7 - ETC and TTC - XXXXXXXXXX

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: 1. Whether a student is entitled to claim the education and tuition tax credits where the student is enrolled in a professional certification program at a professional institute which requires the student to take courses at a university in Canada.
2. Who is responsible for issuing a T2202A certificate to the student: the Institute or the University?

Position: 1. Question of fact.
2. Question of fact.

Reasons: 1. The legislation.
2. The legislation.

August 8, 2013

Individuals Returns Directorate Income Tax Rulings Directorate
Assessment and Benefit Services Branch Business and Employment Division
Legislation Section Ananthy Mahendran
905-721-5204

Attention: Marc Grignon 2013-048329
Senior Programs Officer

Eligibility for the Tuition and Education Tax Credits and Issuance of Form T2202

This is in response to your e-mail dated March 20, 2013, wherein you requested our views as to whether a student is entitled to claim the education and tuition tax credits in the situation where the student is enrolled in a professional certification program at a professional institute which requires the student to take courses at a university in Canada. Particularly, you ask us whether the University should issue a T2202A form to the student enrolled in this program. If not, then you ask whether the student should request such a form from the Institute.

The situation described by you is that a taxpayer, who is a fellowship student ("student"), was enrolled in a professional certification program at the XXXXXXXXXX (the "Institute") and took these courses through open-enrollment at XXXXXXXXXX (the "University"). The professional certification program consists of three compulsory courses, four major courses, and three elective courses. The student is required to take all of her courses (10) at the University and to inform to the Institute as soon as the courses are registered with the University. Once the courses are completed, the student must register these credits with the Institute. The student completed XXXXXXXXXX courses in 2012, but is unable to obtain a T2202A form from the University. The University claims that the student was not enrolled in a qualifying educational program at the University.

Education Tax Credit

The CRA's general view regarding the education tax credit is contained in Income Tax Folio S1-F2-C1, Education and Textbook Tax Credits, which is available on the CRA Web site at http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f2/s1-f2-c1-eng.html.

The education tax credit, as set out in subsection 118.6(2) of the Income Tax Act (the "Act"), is available for students who are enrolled in qualifying (or specified) educational programs as full-time (or part-time) students at designated educational institutions and are entitled to receive a certificate containing prescribed information from the designated educational institutions as proof of enrolment.

In order for a student to claim the education tax credit, the student must satisfy, among other things, the following three requirements:

1. The student must be enrolled at a "designated educational institution".

2. The student must also be enrolled in either a "qualifying educational program" as a full-time student or a "specified educational program" as a part-time student.

3. The student must receive a T2202A form from the designated educational institution.

Each of these highlighted terms is defined in subsection 118.6(1) of the Act and is explained in more detail in paragraphs 1.9 – 1.25 of Income Tax Folio S1-F2-C1.

With respect to the first requirement, a designated educational institution includes a university, college, or other educational institution providing courses at a post-secondary level, or an educational institution in Canada that is certified by the Minister of Human Resources and Skills Development (HRSDC) 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. Where a student takes a course at a HRSDC-certified institution, the course must be undertaken for the purpose of gaining or improving skills in an occupation in order for the student to qualify for the education credit. In contrast, where courses are taken at a university, college or other educational institution providing courses at a post-secondary level, the education credit is not dependent on the individual's purpose for enrolment. However, the courses taken in these institutions must be at the post-secondary school level, which is not required for courses taken at a HRSDC-certified institution. In the situation you described, the student was enrolled in a professional certification program at an educational institution in Canada that was certified by the Minister of HRSDC to be a designated educational institution.

With respect to the second requirement, 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 and in respect of a program at a designated educational institution. If the student receives any benefit in respect of the program from a person with whom the student was dealing at arm's length (other than certain forms of financial assistance, including a scholarship), the program is not a qualifying educational program. The phrase "enrolled...as a full-time student" is not defined in the Act. Paragraphs 1.25 and 1.26 of Income Tax Folio S1-F2-C1 provide general comments regarding the CRA's interpretation of this phrase. The CRA generally relies on the institution's determination as to whether the individual is registered as a full-time student.

Our review of the XXXXXXXXXX program syllabus including program entry requirements indicates that all courses are one semester in length (Fall Semester - September to December, or Winter Semester - January to April) except the final project-based course, which runs over two semesters. Online courses are 10 to 13 weeks long. The students are expected to devote 15 hours per week to each course in order to keep up with the readings, participate fully online and complete the assignments. Final exams are held in the first week of December for Fall semester or the first week of April for Winter semester. Based on the above analysis, the XXXXXXXXXX program is a qualifying educational program for purposes of the education tax credit.

However, as indicated in paragraph 1.25 of Income Tax Folio S1-F2-C1, 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. Where a student is not considered to be enrolled as a full-time student, the student may be eligible for the part-time education tax credit if the program in which the student is enrolled meets the requirements of a specified educational program and the student spends not less than 12 hours per month on courses in the program.

With respect to the third requirement, a T2202A form, titled Tuition, Education and Textbook Amounts Certificate, must be issued by a "designated educational institution" in Canada to certify that a student was, during the particular taxation year for the number of months indicated on the form, enrolled as a full-time student in a "qualifying educational program" or as a part-time student in a "specified educational program" at the designated educational institution.

In order for an entity to be eligible to issue a T2202A form, it must first be a designated educational institution. Based on the information provided, it appears that both entities, the University and the Institute, satisfy this requirement. In order to issue a T2202A form, the entity must be satisfied that the student was enrolled either in a qualifying or a specified educational program offered by the entity. Based on the information you provided to us, it appears that the student was, during the particular taxation year, not enrolled in a qualifying or specified educational program offered by the University and therefore, the University may not be eligible to issue a T2202A form to the student. However, if there is an agency agreement between the University and the Institute and the agency agreement allows the University to issue T2202A form on behalf of the Institute, the University may do so provided all the required conditions of section 118.6 of the Act are satisfied. Alternatively, the Institute may issue this form to the student if the student was, during the particular taxation year, enrolled in a qualifying or specified educational program at the Institute.

Tuition Tax Credit:

The CRA's general view regarding the Tuition Tax Credit is contained in Income Tax Folio S1-F2-C2, Tuition Tax Credit, which is available on the CRA Web site at http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f2/s1-f2-c2-eng.html.

Pursuant to paragraph 118.5(1)(a), a student who is enrolled at an educational institution in Canada may be eligible to claim a tuition tax credit for eligible tuition fees paid in respect of the year to that educational institution, as long as the total of such fees exceeds $100.

In order for a student to claim the tuition tax credit under sub-paragraph 118.5(1)(a)(i) of the Act, the student must satisfy, among other things, the following two requirements:

1. The student would have been "enrolled at an educational institution" in Canada that was providing courses at a post-secondary school level; and

2. The amounts paid by the student would have been paid for courses at the "post-secondary school level".

With respect to the first requirement, paragraph 2.22 of Income Tax Folio S1-F2-C2 provides the meaning of enrolled at an educational institution for purposes of the tuition tax credit. This paragraph states:

The term "enrolled" is not defined in the Act, but it is to be given its ordinary meaning. In the context of enrolment of a student at an educational institution, a student must be registered with the registrar of the institution such that the student would be liable for any tuition fees required to be paid to the institution with respect to the courses within a program of study.

Consequently, tuition fees paid for courses by a full-time or part-time student, may qualify for the tuition tax credit under paragraph 118.5(1)(a), regardless of whether or not the student is enrolled in a qualifying educational program at the educational institution.

With respect to the second requirement, the CRA's interpretive position is stated in paragraph 2.8 of Income Tax Folio S1-F2-C2, Tuition Tax Credit. This paragraph states, in part:

Generally, for a course to be considered to be at the post-secondary school level:

a) the course should provide credit towards a degree, diploma, or certificate; and
b) a prerequisite for taking the course should be completion of secondary school.

It is generally assumed that a course is at the post-secondary school level if the education ministry for the province in which the course is given considers it to be at that level. In any case, it is the status of the course and not the status of the individual that is relevant.

In determining whether a course is at a post-secondary level, the following court cases provide some valuable comments:

In Linda Jacejko v. The Queen, 99 DTC 3514, Rowe, D.J.T.C.C commented that:

There are no specific regulations in place which assist us in defining courses at the post-secondary level. The evidence here and the material filed in relation to the particular brochures describing the tour and the evidence of the Appellant and Mr. Fritze satisfy me that, certainly, the educational component here was substantial, was at the post-secondary level…"

In Marek D. Tarkowski v. The Queen, 2007 DTC 1555, 2007 TCC 632, Webb, J. noted that:

Courses at the post-secondary school level would be courses that would be at a higher level than would be taught at a secondary school. It is the status of the course that is being taken that determines whether or not it is a post-secondary level course and not the status of the individual taking the course.

Based on the information provided, it appears that the courses taken by the student at the University, which provide credits towards the fellowship certificate issued by the Institute, meet the post-secondary school level requirement.

If the student meets the required conditions set out in paragraph 118.5(1)(a) of the Act, the tuition fees paid for these professional courses may qualify for the tuition tax credit.

We hope that these comments will be of assistance to you. If you have any questions or comments, please feel free to contact us.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Customs and 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.

Yours truly,

Sharmini Ratnasingham
for Director
Business and Employment Division
Income Tax Rulings Directorate