28 February 2001 External T.I. 2001-0069345 - EDUCATION TAX CREDIT

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.

Principal Issues: whether senior who receive free tuition may claim the education tax credit

Position: no

Reasons: this is a benefit that is not available to the public at large

		2001-006934
XXXXXXXXXX 	Denise Dalphy, LL.B.
(613) 957-9231
February 28, 2001

XXXXXXXXXX

Re: Education Tax Credit

We are writing in reply to your facsimile transmission of February 8, 2001 wherein you requested an opinion on whether or not persons at the University of XXXXXXXXXX who received free tuition because they are 65 years of age or older are entitled to claim the education tax credit for full-time or part-time students.

Written confirmation of the consequences inherent in particular transactions are given by this directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. Where the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant Tax Services Office. Notwithstanding the above, we are prepared to provide the following comments which are of a general nature.

The education tax credit in subsection 118.6(2) of the Income Tax Act (the "Act") is available to certain students who are enrolled in a "qualifying educational program" or a "specified educational program". These terms are defined in subsection 118.6(1) of the Act. These definitions provide, among other things, that a program is not eligible for education tax credits "if the student receives, from a person with whom the student is dealing at arm's length, any allowance, benefit, grant or reimbursement for expenses other than" certain benefits that are described in subparagraph (a)(i) or (ii) of these definitions (which in general terms, make an exception for recipients of scholarships and Canada Student Loans).

There is a presumption that "free tuition" normally constitutes a benefit unless the benefit is provided to the public at large. In our opinion, a benefit that is only offered to persons who are 65 years of age or older is not a benefit provided to the public at large. Accordingly, the education tax deduction would not be available to persons who receive free tuition by virtue of their age. We would add that this position is consistent with the income tax policy that underlies the education tax credit, which is intended to assist those students who are more or less financing their own training and to avoid providing special tax assistance to those individuals who are already receiving arm's length support from another source.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.

Yours truly,

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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