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.
A. Payette
(613) 957-8953
24(1) 5-921059
Attention 19(1)
September 2, 1992
Dear Sir:
Re: Subsection 118.6(2) of the Income Tax Act (the "Act") and the Education Tax Credit This is in reply to your letters, one received on April 7, 1992 and the other dated July 15, 1992, wherein you requested our interpretation of the recent amendments to subsection 118.6(2) of the Act.
24(1)
OUR OPINION In order to be entitled to claim the education tax credit, a student must meet the criteria set out in subsection 118.6(2) of the Act. Subsection 118.6(2) of the Act reads, in part, as follows:
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"For the purpose of computing the tax payable under this Part by an
individual for a taxation year, there may be deducted an amount
determined by the formula
A x $60 x B
(...)"
"A", since 1988, has been 17%. "B" was recently amended to read "B is the number of months in the year during which the individual is enrolled in a qualifying educational program as a full-time student at a designated educational institution,..." (emphasis ours)
The requirement in subsection 118.6(2) of the Act for enrolment as a full- time student in a qualifying educational program at a designated educational institution must be met on the basis of the facts in each case. The criteria required to be met in order for the program to qualify as a "qualifying educational program" are set out in subsection 118.6(1) of the Act but excludes "any such program if the program is taken by the student
- (i) during a period in respect of which he receives income from an office or employment,
and
- (ii) in connection with, or as part of the duties of, that office or employment."
The amendment results in the requirement being met, in the 1991 and subsequent taxation years, by a student (who otherwise qualifies) taking courses by correspondence or by a person enrolled in a distance education program. Therefore, the comments in paragraphs 8 to 12 of Interpretation Bulletin IT-515 under the heading "Full-Time Attendance" will only be relevant before 1991.
Furthermore, the requirement for enrolment as a full-time student at a designated educational institution is a separate test over and above the requirement respecting a "qualifying educational program", a test similar to that described in paragraph 12 of IT-515 in connection with "full-time attendance". That is, once it is determined that the program at the designated educational institution is a qualifying educational program, in order for a particular student to qualify as a full-time student for the purposes of the education credit, he must be registered in at least 60% of what is considered to be a normal course load under that program for a particular session.
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In view of the foregoing, students following correspondence courses in the 24(1) would only qualify for the education credit in limited circumstances. They have to be enrolled as a full-time student in a program that meets the definition of a "qualifying educational program" as defined in subsection 118.6(1) of the Act as clarified in IT-515 at paragraphs 15 and 16.
24(1)
While we believe a designated educational institution can certify that the essence of the preamble of the definition of "qualifying educational program" is met and that the student is enrolled as a full-time student at the designated educational institution, we do not think that it is the educational institution's responsibility to make the necessary enquiries in order to ascertain whether the student meets the requirements in paragraphs (a) or (b) of the definition of "qualifying educational program" in subsection 118.6(1) of the Act. Consequently, in Part I of Form T2202, we concur that the designated educational institution must certify that the taxpayer is enrolled as a full-time student at the educational institution and that the relevant requirements in the preamble of the definition in subsection 118.6(1) of "qualifying educational program" have been met. It is the student's responsibility, in Part II of Form T2202, to make the required certifications related to paragraphs (a) and (b) of the definition of "qualifying educational program" in subsection 118.6(1) of the Act. Appropriate changes to Form T2202 will be made in due course.
Interpretation Bulletin IT-515 is undergoing a review at the present time, to reflect the recent amendments to section 118.6 of the Act, which will result in the issue of a Special Release in the near future. In addition, the June 1992 Notice of Ways and Means Motion proposes two changes to section 118.6 effective in 1992. The first amendment would increase from $60 to $80 the monthly amount used in the formula to calculate the credit. Second, under specified conditions, the requirement that a student be enrolled on a full-time basis may be removed for students with mental or physical impairment.
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Finally, please note that the responsibility for considering amendments to the Income Tax Act rests with the Minister of Finance, the Honourable Don Mazankowski. You may, therefore, wish to communicate your concerns to that Department directly.
We trust our comments will help to clarify the Department's position in this matter.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
- c. c. J. Oulton, A/Director, Technical Publications Division c.c. P. McNally, A/Director General, Client Assistance Directorate c.c. G. Venner, Director General, Assessment of Returns Directorate
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© Her Majesty the Queen in Right of Canada, 1992
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© Sa Majesté la Reine du Chef du Canada, 1992
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