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:
XXXXXXXXXX submitted a number of questions relating to the full-time and part-time Education Tax Credit and IT-515R2.
Position TAKEN:
Reply prepared in accordance with IT-515R2
Reasons FOR POSITION TAKEN:
N/A
XXXXXXXXXX 5-991250
D. Miller
July 27, 1999
Dear XXXXXXXXXX:
Re: Education Tax Credit - Section 118.6
This is in reply to your letter of April 15, 1999, wherein you asked specific questions relative to section 118.6 of the Income Tax Act (“the Act”) and Interpretation Bulletin IT-515R2, Education Tax Credit.
We have attempted to answer your questions in the same order as they were asked with both the question and the preamble, if any, itemized. However, at the outset, we would like to point out that in a few cases we were not completely clear as to what you were asking.
The University classifies full-time students as those enrolled in 12 or more credits (4 courses) and part-time as those enrolled in less than 12 credits in a semester.
Question#1
Should the University, concerning the Education Tax Credit, automatically assign the number of eligible months according to the classification in its Student Information System for both students at the undergraduate and graduate level?
If not, should it calculate the eligible months according to the number of hours per week or per month within the required three consecutive weeks in order to determine if the result is equivalent to full-time attendance or part-time attendance?
Answer
We have not been provided information regarding your Student Information System. As indicated in paragraph 5 of IT-515R2, “The requirement for enrolment as a full-time student at a designated educational institution is normally a separate test over and above the requirement respecting a “qualifying educational program”. Generally (see exceptions described in paragraph 6 of IT-515R2) we rely on the institution’s determination as to whether an individual meets its requirement for registration as a full-time or part-time student and, in this regard, the classification of the student in your university’s Student Information System may be acceptable. However, for purposes of the computation of the education tax credit, and more particularly, the determination of the number of “eligible months” in which a student is entitled to the education tax credit, regard must also be given to the definition of “qualifying educational program” for purposes of the full-time education tax credit and “specified educational program” for purposes of the part-time education tax credit.
With respect to the full-time education tax credit, the Income Tax Act states that the credit is based on “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”. To be a “qualifying educational program”, a program must run at least three consecutive weeks and must require instruction or work in the program of at least ten hours a week throughout its duration and not simply for a minimum three work period. Accordingly, once you have determined the duration of the qualifying educational program (e.g. three or more weeks), a full-time student would be entitled to the full-time education tax credit for any month the qualifying “three or more weeks” occurred. We are not in a position to determine if the number of eligible months computed under the process explained above would be consistent with information obtained from the Student Information System.
It should also be pointed out that it is the Department’s position, as indicated in paragraph 6 of IT-515R2, that a student who is in regular attendance in a “qualifying educational program” is considered to be enrolled as a full-time student. Accordingly, you may have to factor this in where you have a student that would not otherwise be considered a full-time student under the Student Information System but is in regular attendance in a “qualifying educational program”.
As per paragraph 6 of IT515R2, “students participating in post-graduate studies on a regular basis in a particular month are ordinarily considered to be enrolled as full-time students” even though attendance is minimal.
Question #2
Does this mean that post-graduate students are automatically considered in full-time attendance mostly because they spend time on projects outside the classroom (such as research, writing a thesis) regardless of the courses they are registered to and their classification at the university?
Answer
Where the post-graduate student meets the conditions of paragraph 6 of IT-515R2, regardless of the institution’s classification (e.g. in your case, the classification otherwise determined under the Student Information System), the Department will normally regard that student as being a full-time student at that institution. Provided that the post-graduate student also meets the “qualifying educational program” requirement, that is, the ten hour per week test for at least three consecutive weeks, the institution would then be expected to determine the number of “eligible months” on Form T2202 on that basis. Time spent by a post-graduate student on research outside the classroom and writing a thesis qualifies as work in the program with respect to the “ten hour per week” test (see our response to Question #3 below).
Many post-graduates are classified as full-time even though they may not have the ten hours per week of formal lectures. The bulletin states that this can be augmented by adding the time a student would normally spend on work assignments.
Question #3
In such cases, should we also apply the number of hours per week (spent in work assignments) within the three consecutive weeks?
Answer
In determining whether a post-graduate student is enrolled in a “qualifying educational program”, paragraph 11 of IT-515R2 states, in respect of the “10 hour per week of instruction or work” requirement, that time spent on research for the purpose of writing a thesis qualifies. The institution may also augment the student’s time by a reasonable estimate of time outside the classroom and laboratory normally required and expected of a student or post-graduate student for work assignments or other items listed in paragraph 11 of the bulletin.
Question #4
What is considered a “reasonable estimate of time spent on work assignments”? Should we consider that any student, undergraduate and graduate, is eligible for the same amount of time spent on work assignments as the time spent in the classroom? For example: 3 hour lecture = 3 hours of study time or work on assignments?
Answer
The amount of lecture time does not equate to the additional time, if any, spent on work assignments or other items. The university is best prepared and responsible for making a reasonable estimate of the time normally expected and required of a student during a particular program for work assignments or other items as listed in paragraph 11 of IT-515R2. Study time is not considered to be a component of the extra work outside the classroom or laboratory.
Paragraph 1 of IT-515R2 states that “a student can claim an Education Tax Credit for each month in the calendar year during which the student is enrolled in a qualifying educational program as a full-time student at a designated educational institution, including the months in which a course starts and ends”.
Question #5
Does this mean, for example, that if a course starts on September 28th and ends on November 2nd of the same session a student could claim the months of September and November even though there are not three consecutive weeks in these two months of attendance?
Answer
The student must be enrolled in a qualifying educational program as a full-time student at a designated educational institution. If the student meets each of the above conditions for the month in which the course begins and ends, then those months may be included. It is not required that there be 3 consecutive weeks in the month, rather that the student be enrolled in a program of at least 3 consecutive weeks and for each of those 3 or more consecutive weeks not less than 10 hours is spent on work or courses in the program. Thus, if the months of September or November are part of a consecutive three or more week period and in each of these weeks there are 10 hours of work or instruction in the program, then these months may qualify.
Question #6
If yes, does this apply to graduate and undergraduate programs?
Answer
This applies equally to graduate and undergraduate students.
Many students don’t wait for their receipts to be mailed and call to get the information over the phone.
Question #7
Is the T2202 tax receipt mandatory when submitting a tax report?
Or can it be submitted only upon request?
Answer
As stated in paragraph 4 of IT-515R2, in all cases the student must obtain a certificate as proof of enrolment. It is no longer necessary to file the certificate with the T1 income tax return, but a copy should be retained should the Department subsequently request it.
The bulletin indicates “a qualifying program has to run for at least 3 consecutive weeks plus, must also require instruction of at least 10 hours per week throughout its duration”.
Question #8
Does this mean that as long as there is a period of 3 consecutive weeks and there are ten hours of instruction per week for the duration of a 4 month semester, the program is eligible and therefore a student is in full-time attendance and may claim 4 months of full-time attendance?
Answer
Yes, provided the student has been classified by the institution as a full-time student or you consider the student to be in regular attendance in that program (e.g. paragraph 6 of IT-515R2).
Question #9
Is a student registered to 4 courses automatically eligible for full-time attendance regardless of the hours per week?
Answer
As stated in paragraph 11 of IT-515R2 a student taking four full courses or more at a university, college or other educational institution in Canada will be accepted as being enrolled in a qualifying educational program.
Question #10
If we need to assure there are 3 consecutive weeks in each month to qualify, must we follow the calendar months? For example: course starts May 1 and ends July 10. Assuming there are 10 hours of lecturing, the student would be eligible if we count 3 consecutive weeks as being May 1 to May 15 = 3 consecutive weeks, May 16 to May 30 = 3 consecutive weeks, and so on.
Answer
See our response to Question #1 as well as paragraph 1 and 10 of IT-515R2. You would not need to ensure that there is 3 consecutive weeks in each month. For example, assuming the student meets the “10 hours per week” test in each week throughout the duration of that program (May 1 to July 10), the student will have 3 eligible months.
Question #11
If the exam period at the end of each semester lasts only one week in the last month of the semester where there is no formal lecturing, does this month count?
Answer
As stated in paragraph 1 of IT-515R2, “If mandatory final exams are taken in a month ... that month may qualify ... provided the examinations are an integral part of the course of study and other conditions ... are met”. The other conditions are with respect to the “full-time student” requirement and “designated educational institution” requirement.
We trust you will find the above comments to your satisfaction.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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