20 May 1999 External T.I. 9911715 - PART-TIME STUDENTS

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.

Principal Issues:

A contemporary dance school whose Senior Dance Program is certified by the Minister of Human Resources Development has requested our opinion on the flexibility of the guidelines regarding the possible certification of their Junior Dance Program for the purposes of the part-time education tax credit.

Position TAKEN:

Referred to Human Resources Development Canada and enclose IT515-R2.

Reasons FOR POSITION TAKEN:

The Minister of Human Resources Development Canada has the responsibility of certifying that the educational institution provides programs that meets the “job function test”.

XXXXXXXXXX 5-991171
D. Miller
Attention: XXXXXXXXXX

May 20, 1999

Dear XXXXXXXXXX:

Re: Part-Time Credit T2202E Forms Issued to Students

This is in reply to your letter of April 29, 1999, regarding educational institutions and designated educational institutions as they are described in subsections 118.5(1) and 118.6(1) of the Income Tax Act (the “Act”).

You offer a Senior Professional Program, affiliated with the XXXXXXXXXX, designed to prepare students for a career in modern dance performance. You state that your organization has been certified by the Minister of Human Resources Development (“HRD”) as an educational institution pursuant to sections 118.5 and 118.6 of the Act with respect to this program. You also offer a Junior Professional Program, affiliated with the XXXXXXXXXX, and in previous years you have been advised that this is not included in your certification. You have enquired about certifying your Junior Professional Program in order that the students may qualify for the part-time student education tax credit.

Our Comments

To qualify for the part-time education tax credit pursuant to proposed clause (b) of variable B of subsection 118.6(2) of the Act, a student must be enrolled at a “designated educational institution” in a “specified educational program” that provides that each student in the program spend not less than 12 hours in the month on courses in the program. A “specified educational program” is a “qualifying educational program” with the 10 hours per week reference removed. A “qualifying educational program” must, among other things, be a program of not less than 3 consecutive weeks duration. A ”designated educational institution” means, among other things, an educational institution “certified by the Minister of Human Resources Development to be an educational institution providing courses, ... that furnish a person with skills for, or improve a person’s skills in, an occupation”.

You have advised us that HRD has refused to certify your “junior” program with respect to the definition of “designated educational institution”. As indicated above, HRD has the mandate for certification and paragraph 9(b) of IT-515R2, Education Tax Credit, (attached) provides the contact for making enquiries in this regard. However, in addition to the requirement that the institution be a “designated educational institution”, subsection 118.6(2) of the Act (current and proposed) also requires that with respect to enrolment at an institution certified by HRD the student must be enrolled in the program to obtain skills for, or improve the student’s skills in, an occupation.

The Department’s interpretation of “enrolled in the program to obtain skills for, or to improve skills in, an occupation” is discussed in paragraph 1 of IT-515R2 and paragraph 8 of IT-516R2. The expression “enrolled in the program to obtain skills for an occupation” means that there must be sufficient skills to be acquired in the program to work at an occupation. The expression “enrolled in the program to improve skills in an occupation” implies that the student already possesses sufficient skills to enable the student to work in an occupation and the program must be capable of improving those skills. It is a question of fact whether the Junior Professional Program, in itself, is sufficient to furnish a high school student with enough skills to enable the student to work at an occupation. It is likely that most high school students (i.e. juniors) would not already possess sufficient dance skills to enable them to work in that occupation and without evidence to the contrary, we would be inclined to think that a junior program does not, in itself, provide sufficient skills to enable the student to work in that occupation. However, if the student goes on and takes the senior program, then both programs will generally qualify, subject to the institution being certified by HRD.

With respect to the tuition credit described in subsection 118.5(1) of the Act, we would like to bring the exclusions of clauses (A) and (B) of subparagraph (ii.2) of paragraph (a) to your attention. Clause (A) disqualifies an individual from claiming the tuition credit unless they have attained the age of 16 by the end of the year. Clause (B) is the “occupational skills test” (identical to the test explained above in subsection 118.6(2) of the Act) stating that the credit is only available if the student is enrolled in a program to obtain skills for, or improve skills in, an occupation.

We trust that these comments will be of assistance.

Yours truly,

Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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