15 March 1990 Ruling HBW935973 F - Eligibility of Foreign Students to Claim Refundable Ontario Tax Credits

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.

March 15, 1990

19(1)

We are writing in reply to your letter of January 31, 1990, concerning the eligibility of foreign students to claim refundable Ontario tax credits.

For your information please find enclosed a copy of Interpretation Bulletin IT-221R2 entitled "Determination of an Individual's Residence Status".  Paragraphs 15 and 16 under the heading "Entering Canada" set out our position with respect to sojourners and immigrants.  As discussed with  19(1)  there is no reason for these rules not to apply in determining the residence of foreign students for federal income tax purposes.

Individuals (including foreign students) who sojourn (i.e. are temporarily present) in Canada for a total of 183 days or more in any calendar year are deemed by paragraph 250(1)(a) of the Income Tax Act to be resident in Canada for the entire year.  These individuals must use the package for INDIVIDUALS OUTSIDE CANADA when filing their federal income tax returns.  You will note that this package does not contain a T1C (ONT) form because deemed residents are taxed the federal surtax regardless if they are present in a province on December 31st.

One of the requirements for determining eligibility for Ontario refundable tax credits is that the individual must be resident in Ontario on December 31 of the given year.  The relevant criterion, in our opinion, in making this determination is whether or not one is actually resident in Ontario on December 31.

On the other hand, where an individual enters Canada and establishes residential ties he will generally be considered to have become a resident of Canada for federal income tax purposes (see paragraphs 6 to 9 of the Bulletin).  Of course, if these individuals were resident in Ontario on December 31, they would use the package for RESIDENTS OF ONTARIO and would satisfy the residency requirements necessary to be eligible for the provincial refundable tax credits.

Accordingly, because the interpretation of residence in Ontario's income tax legislation should be the same as the federal Income Tax Act, the current wording of Ontario's legislation does not, in our opinion, allow foreign students not actually resident in Ontario to claim the property tax credit.

It should be noted that any change to the provincial tax credits requires the agreement of the Minister of Finance which should be initiated by a formal request.  In this regard, you may wish to telephone Frank Gregg (992-1731), Acting Director, Federal-Provincial Relations Division, Department of Finance or Steve Tierney (992-3530) of the same Division.

We trust that this will be of assistance and if you require any further information please contact the writer.

Yours sincerely,

C. Savage A/Director Provincial and International Relations Division

b.c.c.:     C. Charette      Non-Resident Taxation Division

BF/jmb no2-260File copy Sequence file Author's copyChron fileAccess to Info(2)