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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Eligibility for the education tax credit.
Position: Question of Fact.
Reasons:
Eligibility for the education tax credit is to be determined on a case-by-case basis. An individual must satisfy all of the conditions of section 118.6.
2002-015851
XXXXXXXXXX R. Shields
(613) 948-5273
October 29, 2002
Dear XXXXXXXXXX:
Re: The education tax credit
This is in response to your letter of August 15, 2002 requesting information about the education tax credit.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.
The CCRA's general views in respect of the education tax credit are found in Interpretation Bulletin IT-515R2, Education Tax Credit. An education tax credit is available for students enrolled in a qualifying educational program as a full-time student or in a specified educational program as a part-time student at a designated educational institution. The phrase "designated educational institution" is defined in subsection 118.6(1). An educational institution can satisfy this definition if certified by the Minister of Human Resources Development (HRD) to be an educational institution providing courses that furnish a person with skills for, or improve a person's skills in, an occupation.
When enrolment is at an institution certified by HRD, subsection 118.6(2) contains the additional requirements that the student has attained the age of 16 before the end of the year and is actually enrolled in the program to obtain skills for, or improve the student's skills in, an occupation. The CCRA's interpretation of "enrolled in the program to obtain skills for, or to improve skills in, an occupation" is discussed in paragraph 1 of IT-5l5R2.
Your first question is whether there is a weekly hour attendance requirement to qualify for the education tax credit. To be a "qualifying educational program" as required for the full-time credit described in paragraph 118.6(2)(a), 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.
It should also be noted that certain factors disqualify a program from being a qualifying educational program. As a result, the credit is not available to a student who receives any allowance, benefit, grant or reimbursement for expenses (other than as a scholarship, fellowship or bursary, prize for achievement in a field of endeavour ordinarily carried on by the student or loan granted in accordance with the Canada Student Loans Act or Student Loans and Scholarships Act of the Province of Quebec) from a person with whom the student is dealing at arm's length. Additionally, the credit will not be available if the program is taken by the student while receiving income from an office or employment and in connection with that office or employment.
Paragraph 118.6(2)(a) also imposes the separate requirement that the individual be enrolled as a "full-time student". Although this term is not defined in the Act, paragraphs 5 to 7 of IT-515R2 provide general comments regarding the CCRA's interpretation of the phrase "full-time student". As indicated in paragraph 5 of IT-515R2, 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. Thus, the CCRA must generally rely on the institution's determination as to whether an individual is registered as a full-time student.
To claim the part-time education tax credit, described in paragraph 118.6(2)(b) and available for years after 1997, the student must be enrolled in a "specified educational program." A specified educational program is defined in subsection 118.6(1) to be a qualifying educational program without the 10 hour per week requirement, and which requires the individual to spend no less than 12 hours per month on the program's courses.
Your second question relates to the amount of the education tax credit for the years 1998, 1999 and 2000. For these particular years, the dollar amount specified in factor B of subsection 118.6(2) for use in the formula to calculate the education tax credit is $200 for the full-time credit and $60 for the part-time credit.
Your third question is whether it is necessary to obtain proof from the school of attendance at the program in order to obtain the education tax credit. As paragraph 4 of IT-515R2 indicates, in all cases where an education tax credit or a transfer of the education tax credit is claimed, the student must obtain a certificate authorized by the Minister (Form T2202, Education Credit Certificate for Full-Time and Part-Time Students, or T2202A, Tuition and Education Credit Certificate) as proof of enrolment issued by the designated educational institution and containing prescribed information. While it is no longer necessary to file the certificate with the T1 income tax return, taxpayers who claim all or a portion of the available education tax credit should retain a copy of the certificate for their records as the Minister of National Revenue has the authority under subsection 220(2.1) to subsequently request it.
We are unable to confirm whether any particular student qualifies for an education tax credit, as this is a question of fact to be determined on a case-by-case basis.
We trust that these comments will be of assistance.
Yours truly,
Mickey Sarazin, C.A.
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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