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.
Principal Issues: Discussion of the application of the education tax credit. POSITION: General comments provided
Reasons: Position consistent with IT-515R2 and other published interpretations
M. Thomson
XXXXXXXXXX (613) 957-3496
2007-024265
October 31, 2007
Dear XXXXXXXXXX:
Re: Education tax credit
This is in reply to your email correspondence dated June 28, 2007, wherein you asked a series of questions related to the education tax credit (the "ETC").
We understand that you have previously received detailed comments in response to the questions that are the basis for this request from the Electronic and Print Media Directorate of the CRA. However, we have provided the following additional general comments for your benefit.
The CRA's general view regarding the ETC is contained in Interpretation Bulletin IT-515R2 Education Tax Credit (the "Bulletin"), which is also available on the CRA web site at http://www.cra-arc.gc.ca.
Pursuant to subsection 118.6(2) of the Act, an individual's ETC is based on the number of months that the student is enrolled in a "qualifying educational program" as a full-time student at a "designated educational institution". A part-time student may also be eligible for the ETC if he or she is enrolled in a "specified educational program". These terms are defined in subsection 118.6(1) of the Act and are explained in more detail in the Bulletin.
A "designated educational institution" may issue a T2202 or T2202A to a full-time student enrolled in a "qualifying education program" or to a part-time student enrolled in a "specified educational program".
The term "qualifying educational program" requires, in part, that the program run for at least three consecutive weeks and must provide that each student taking the program spend at least 10 hours per week on courses or work in the program. If the student receives any benefit in respect of the program from a person with whom the student was dealing at arm's length (other than certain forms of financial assistance), the program is not a qualifying educational program.
The phrase "enrolled...as a full-time student" is not defined in the Act. However, paragraphs five to seven of the Bulletin provide general comments regarding the CRA's interpretation of this term. The CRA generally relies on the institution's determination as to whether the individual is registered as a full-time student. However, as indicated in paragraph five of the Bulletin, the requirement for enrolment as a full-time student at a designated educational institution must ultimately be met on the basis of the facts of each case.
While in many instances, a student will be considered a full-time student for ETC purposes if the student's program is a qualifying educational program, these tests remain distinct and are not necessarily the same. For example, in certain instances, institutions establish full-time enrolment based on a minimum amount of credits, whereas a qualifying educational program requires a minimum amount of hours (10 hours per week), which may include both lecturing time and a reasonable estimate of time for work assignments.
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 three consecutive weeks in the calendar month, rather that the student be enrolled in a program which runs for at least three consecutive weeks and which requires that for each of those three or more consecutive weeks not less than 10 hours is spent on work or courses in the program.
If a mandatory final exam that is an integral part of the course of study is taken in a particular month where there is no formal instruction or classroom activity, such month may qualify for the ETC, provided the student otherwise qualifies for the credit. Other periods where there are no classes, such as reading week, may be included in the three-week period as long as the hourly requirement is met.
Where the student is enrolled at a designated educational institution but does not qualify as a full-time student, the student may still qualify for the part-time ETC. To qualify, the student must be enrolled 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 (month in this respect refers to calendar month). A specified educational program means a program that would be a qualifying educational program if the definition for that term were read without reference to the 10 hours per week.
Where a student withdraws from a course before it is complete, we will generally rely on the educational institution's determination as to whether the student was enrolled in the course at any particular time. However, it remains a question of fact whether (after withdrawal from a course) the student's program otherwise continues to meet the definition of a qualifying educational program or a specified educational program. Consequently, withdrawal from a course does not necessarily preclude the student from being entitled to the ETC.
It should be noted that a student eligible for the disability tax credit, or who has a mental or physical impairment making it unreasonable for them to be enrolled as a full-time student, is considered eligible for the full-time ETC where they qualify for the part-time ETC. See paragraph two of the Bulletin for further detail, and for information about the medical certification required as support for eligibility.
We trust that these comments will be of assistance.
Yours truly,
Robin Maley
Manager
Non-Profit Organizations and
Aboriginal Issues
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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