16 June 1995 External T.I. 9509005 - TUITION AND EDUCATION TAX CREDIT

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

									950900
XXXXXXXXXX							D. Zion

Attention: XXXXXXXXXX

June 16, 1995

Dear Sirs:

Re: Tax Forms for Canadian Students

We are writing in response to your letter of March 24, 1995 in which you requested clarification of what tax forms the XXXXXXXXXX (the University) should issue to its Canadian students.

As discussed in our telephone conversations of May 25 and 31, 1995 (Zion/XXXXXXXXXX), we will provide general comments regarding the circumstances under which Canadian students would be eligible for the tuition and education tax credits and the corresponding forms which the University should issue if the Canadian students meet the criteria. Should you have any questions or require further information you may contact Mr. Derrick Beaton of Edmonton Tax Services. He may be reached by calling (403) 990-7041 and would be pleased to provide assistance.

XXXXXXXXXX

As discussed in our conversation, there are two possible education related tax credits available to Canadians who meet the specific requirements of the Canadian Income Tax Act (the Act). These are the tuition tax credit and the education tax credit. Interpretation Bulletins IT-515R, "Education Tax Credit" and IT-516R, "Tuition Tax Credit", which you have on hand, discuss the Department's position regarding these tax credits in more detail.

If the University receives the tuition fees, provides the instructors and instruction and awards the degrees, we assume that the students must be enrolled and registered in an American university. As discussed with you by telephone, one of the main tests in the Act for the tuition fees paid to a foreign university to be eligible for the tuition tax credit is the requirement that the course cannot be less than thirteen consecutive weeks in duration. The only exception to the thirteen week rule is for students living in Canada who commute from their residence near the boundary between Canada and the United States to an educational institution in the United States.

Accordingly, the tuition fees paid by a student enrolled in a university outside Canada may be eligible for the tuition tax credit provided the student is in full-time attendance in a course leading to a degree and the course is at least 13 weeks in duration. From the information provided, we would agree that this appears to be the case where the Canadian student physically attends your XXXXXXXXXX campus and is considered to be in full-time attendance by the University. We would like to mention that should the same criteria be met by a Canadian student attending a facility in Canada, the tuition would also be eligible for the tuition tax credit. However, from the information provided regarding the current situation where the courses offered in Canada are of only three weeks duration and the students are not considered to be in full-time attendance, the tuition paid would not qualify for the tuition tax credit.

As discussed in paragraph 6 of IT-516R, if a student resides throughout the year in Canada near the boundary between Canada and the United States and is enrolled in, and commutes to, an educational institution in the United States providing courses at a post-secondary school level, then a tuition tax credit may be claimed for any tuition fees paid for the year to that educational institution. The fees must exceed $100 in order to qualify for the tax credit. Unlike the situation discussed above, a student who meets these requirements need not be in full-time attendance and the courses need not be 13 weeks in duration to be eligible for the tuition tax credit. In these situations, form TL11C should be completed and issued to the student.

A Canadian student in full-time attendance at a university outside Canada which qualifies as a designated educational institution will be eligible for the education tax credit if the course is of not less than 13 consecutive weeks duration and leads to a degree. Paragraphs 12(c) and (d) of IT-515R contain comments which will be of assistance to you in this regard. Where the student is entitled to claim the education tax credit, the university would complete part 1 and issue to the student form T2202. In the case where a Canadian student resides in Canada near the boundary between Canada and the United States, the course need not be of 13 consecutive weeks in duration or lead to a degree, but must be a course at a post-secondary school level and be a qualifying educational program. Paragraphs 14 to 16 of IT-515R discuss this requirement in further detail.

Please note that a student need not be enrolled on a full-time basis to be eligible for the education tax credit in cases where the student is eligible for a disability tax credit for the year or cannot be enrolled on a full-time basis at any time in the year by reason of the student's mental or physical impairment, as certified in writing by a medical doctor, or where the impairment is an impairment of sight, a medical doctor or optometrist. Again, it is form T2202 which should be completed and issued to Canadian students who would meet these requirements.

We would caution that the above comments reflect an expression of opinion only and as such are not binding upon this Department. We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch