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.
xxxxxxxxxx 992153
C. Tremblay
September 27, 1999
Dear XXXXXXXXXX:
Re: XXXXXXXXXX and the Tuition Tax Credit
This is in reply to your letter of July 16, 1999, wherein you raised an issue with respect to a problem involving post-secondary institutions unable to issue T2202 slips to students who have taken courses at recognized post-secondary institutions given in partnership with the XXXXXXXXXX. The problem occurs because the post-secondary institution does not collect tuition fees on behalf of, or from the students but rather XXXXXXXXXX collects the tuition fees from the students and pays for the program by way of an agreed upon program delivery fee,
The types of educational institutions in Canada whose tuition fees may entitle a student to claim the tuition tax credit are described in paragraph 118.5(1) (a) of the Income Tax Act (the "Act"). Paragraph 118.5(1)(a) of the Act provides that a student must be enrolled at
(i) a university, college or other educational institution providing courses at a post-secondary school level, or
(ii) an educational institution in Canada certified by the Minister of Human Resources Development to be an educational institution providing courses ( other than courses designed for a university credit) that furnish a person with skills for, or improve a person's skills in, an occupation.
In the case of an institution described in (i) above, subparagraph 118.5(1)(a)(ii.1) of the Act requires that the courses for which the fees are paid must actually be at the post-secondary school level. Where the institution is described in (ii) above, clause 118.5(1)(a)(ii,2)(B) of the Act denies a tuition credit in respect of tuition fees paid to an educational institution if the purpose of the individual's enrollment cannot reasonably be regarded as being to provide the individual with skills, or to improve the individual's skills in an occupation.
In a situation, such as the one presented, where XXXXXXXXXX is offering courses in partnership with recognized post-secondary institutes, the Department would require a copy of the memorandum of understanding and the contract for program cost and delivery in order to satisfy ourselves that such courses meet the requirements of subparagraphs 118.5(1)(a)(i) and (ii.1) of the Act. Once the Department is satisfied the course does meet the above requirements, we would then contact either the post-secondary institution Of XXXXXXXXXX to inform them that a T2202 slip can be issued to the students enrolled in that particular course. It is not uncommon for partnership arrangements, such as the one you have briefly described, to be utilized in offering a particular program to the students. The Department can generally accommodate such arrangements once we have a clearer understanding of the nature of the course or program involved.
XXXXXXXXXX stated in their letter that their ultimate goal is to offer post-secondary programs independently of other institutions and would like to be recognized as an educational institution for the purposes of the tuition tax credit. Whether they request to be recognized as an educational institution providing post-secondary courses pursuant to subparagraph 118.5(1)(a)(i) of the Act or an institution certified by the Minister of Human Resources Development Canada pursuant to subparagraph 118.5(1)(a)(ii) of the Act is a separate issue as noted above.
For purposes of subparagraph 118.5(1)(a)(i) of the Act, there is no all-inclusive list of universities, colleges or other educational institutions in Canada providing courses at a post-secondary school level. However, most Canadian Universities and Colleges are listed on the internet at http://www.intergov.gc.ca/edulindex.html. As you are no doubt aware, The Constitution Act gives exclusive authority to each province in Canada to make laws in relation to education. In Ontario, the Ministry of Training, Colleges and Universities is responsible for post-secondary education. They are also responsible for registration of such institutions.
The Department has made the following assumptions and interpretations that are normally applied in determining eligibility of an institution for purposes of subparagraph 118.5(1)(a)(i) of the Act:
(a) Unless there is specific information to the contrary, an educational institution whose name includes the words "university" or "college" is usually eligible, as long as courses are given at a post-secondary school level.
(b) An "other educational institution" may include a professional organization that provides educational courses to members, as long as one minimum qualification for membership is secondary school graduation.
(c) An educational institution is not ineligible under subparagraph 118.5(1)(a)(i) solely by reason of the fact that it provides other courses in addition to post-secondary school level courses.
(d) An institution in Canada that has been designated as a "specified educational institution" under the Canada Student Loans Act or that has been recognized for the purposes of the Canada Student Financial Assistance Act or the Act Respecting Financial Assistance for Students of the Province of Quebec is presumed to satisfy the eligibility requirements.
For purposes of subparagraph 118.5(1)(a)(ii) of the Act, we suggest that XXXXXXXXXX contact Human Resources Development Canada which is responsible for the certification of educational institutions for that provision. Institutions wishing to establish whether they qualify as an educational institution for purposes of subparagraph 118.5(1)(a)(ii) of the Act should direct their enquiry to:
Certification of Private Educational Institutions
Human Resources Development Canada
Phase IV, 4th Floor,
Place du Portage
140 Promenade du Portage
Hull, QC, K1A 0J9
The tuition tax credit, is a non-refundable tax credit, and is generally determined by the amount of eligible tuition fees paid by the student for the year. If a claim relates to an educational institution certified by the Minister of Human Resources Development, as described in subparagraph 118.5(1)(a)(ii) of the Act, the purpose for the student's enrollment at the institution, as mentioned above, must be to furnish or improve a student's skills for an occupation.
Interpretation Bulletin, IT-516R2, Tuition Tax Credit, (copy attached), describes further the Department's views on whether tuition fees may qualify for the tuition tax credit.
Should the Institute request the Department's assistance with respect to a particular arrangement, they should forward all relevant information to:
Individual Returns and Payments
Processing Directorate
25 McArthur Road
Tower "C"
Vanier, Ontario
K1A 0L5
We trust our comments are of assistance to you.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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