Citation: 2012 TCC 277
Date: 20120726
Docket: 2011-3835(IT)I
BETWEEN:
MARK ZOCHOWSKI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, Mark Zochowski, was
enrolled in a masters of science and education program at Capella University in 2009. The issue is whether he is entitled to claim credits under the Income
Tax Act relating to this program. Three credits are at issue: the tuition
tax credit, the education credit and the textbook credit.
[2]
The appellant also claimed expenses
for Humber College in Toronto but this claim was withdrawn at the hearing because
the course was taken in a prior taxation year.
[3]
Capella University is based in the United States and offers
online educational programs. The appellant lives in Ontario and took the
masters program over the internet.
[4]
In 2009, the appellant completed
four semesters of ten weeks each. A break of a few weeks was provided between
each semester. Three of the semesters were full-time and one was part-time.
[5]
Capella University
refused to provide the appellant with the CRA form required for the education credit
because the courses were not of 13 weeks consecutive duration.
[6]
It is clear that the appellant
does not qualify for any of the three credits that are at issue because the
program did not involve a course of at least 13 consecutive weeks duration.
[7]
Excerpts from the
relevant legislation are set out below,
with the applicable parts underlined.
[8]
The relevant provision
for the tuition credit is paragraph 118.5(1)(b)
of the Act.
118.5 (1)
– Tuition credit - For the purpose of computing the tax payable under this
Part by an individual for a taxation year, there may be deducted,
[…]
(b) [university outside Canada]
- where the individual was during the year a student in full-time attendance at
a university outside Canada in a course leading to a degree, an amount equal to
the product obtained when the appropriate percentage for the year is multiplied
by the amount of any fees for the individual’s tuition paid in respect of the
year to the university, except any such fees
(i) paid
in respect of a course of less than 13 consecutive weeks duration,
(ii) paid
on the individual’s behalf by the individual’s employer to the extent that the
amount of the fees is not included in computing the individual’s income, or
(iii) paid
on the individual’s behalf by the employer of the individual’s parent, to the
extent that the amount of the fees is not included in computing the income of
the parent by reason of subparagraph 6(1)(b)(ix); and […]
[9]
As for the education credit, the
relevant references are the definition of “designated educational institution”
in s. 118.6(1) and clause B of the formula in s. 118.6(2).
118.6 (1) [Education
credit -] Definitions - For the purposes of sections 63 and 64 and this
subdivision,
“designated
educational institution” means
[…]
(b) a university outside Canada at which the
individual referred to in subsection (2) was enrolled in a course, of not less
than 13 consecutive weeks duration, leading to a degree, or […]
(2) Education credit - There may be deducted in computing an
individual’s tax payable under this Part for a taxation year the amount
determined by the formula
A × B
Where
A is
the appropriate percentage for the year; and
B is
the total of the products obtained when
(a) $400 is multiplied by 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,
and
(b) $120 is multiplied by the number of
months in the year (other than months described in paragraph (a)), each of
which is a month during which the individual is 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,
if the
enrolment is proven by filing with the Minister a certificate in prescribed
form issued by the designated educational institution and containing prescribed
information and, in respect of a designated educational institution described
in subparagraph (a)(ii) of the definition “designated educational
institution”
in subsection (1), the individual has attained the age of 16 years before the
end of the year and is enrolled in the program to obtain skills for, or improve
the individual’s skills in, an occupation.
[10]
The appellant submits that a “qualifying
educational program” for purposes of the above provision only requires a
program of three consecutive weeks. This is true but it does not assist the
appellant because the formula in s. 118.6(2) also requires that the program be
at a “designated educational institution.” It is this term that has the 13 week
requirement.
[11]
As for the textbook credit, the
applicable provision is subsection 118.6(2.1). It requires as a condition that the taxpayer be entitled to the
education credit in s. 118.6(2). This imports the 13 week requirement into
the textbook credit.
118.6 (2.1) Post-secondary textbook credit - If an amount may be deducted under
subsection (2) in computing the individual’s tax payable for a taxation
year, there may be deducted in computing the individual’s tax payable under
this Part for the year the amount determined by the formula
A × B
where
A is the appropriate percentage for the
year; and
B is the total of the products obtained
when
(a) $65 is
multiplied by the number of months referred to in paragraph (a) of the
description of B in subsection (2), and
(b) $20 is
multiplied by the number of months referred to in paragraph (b) of that
description.
[12]
Given the clear statutory
language, the relief that the appellant seeks cannot be provided.
[13]
The appellant also raised
arguments based on fairness but relief cannot be granted on this ground alone.
The appellant further submits that the Canada Revenue Agency administers the
provisions based on courses of three weeks duration. This submission is also
not of assistance because the legislation has since been amended to reduce the
course requirement to three weeks. The amendments were not effective in 2009.
[14]
The appeal will be dismissed.
Signed at Toronto, Ontario this 26th day of July
2012.
“J. M. Woods”
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