Principal Issues: [TaxInterpretations translation] Is a university course given in 3 modules with a module of 2 consecutive days per month a "qualifying educational program" pursuant to section 118.6?
Position: We are of the view that the term "program" as used in the definition of "qualifying educational program" in subsection 118.6(1) refers to the study program rather than to each individual course.
Reasons: Legislative analysis.
XXXXXXXXXX 2011-040399 I. Landry, M.Fisc.
September 22, 2011
Dear Sir,
Subject: Education Amount
This is in response to your e-mail of April 14, 2011 in which you requested our comments regarding your eligibility for the education tax credit under section 118.6 of the Income Tax Act (the "Act"). We apologize for the delay in responding to your request.
Briefly, you indicated in your email that you are a part-time student at XXXXXXXXXX (the "University"). You indicated that you registered in 2010 for certain XXXXXXXXXX courses offered by the University as part of the XXXXXXXXXX program. The University offers the possibility to attend those XXXXXXXXXX courses in 3 modules at the rate of one module per month of 2 consecutive days of 7.5 hours each, for a total of 45 hours per course. Each course is entitled to 3 credits and leads to a degree. You wish to know if such courses meet the "3 consecutive weeks" requirement in order to qualify as a qualifying educational program or a specified educational program within the meaning of section 118.6 of the Act.
Unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
Our Comments
As stated in paragraph 22 of Information Circular 70-6R5, it is the practice of the Canada Revenue Agency (the "CRA") not to issue a written opinion regarding proposed transactions otherwise than by advance rulings. Furthermore, when it comes to determining whether a completed transaction has received appropriate tax treatment, the determination is made first by our Tax Services Offices as a result of their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you. These comments may, however, under certain circumstances, not apply to your particular situation.
Under subsection 118.6(2), an individual is entitled to an education tax credit if the individual is enrolled in a qualifying educational program as a full-time student at a designated educational institution or in a specified educational program at a designated educational institution, in which the student must spend at least 12 hours per month. The terms "designated educational institution", "qualifying educational program" and "specified educational program" are defined in subsection 118.6 (1).
A designated educational institution includes, among others, the following institutions located in Canada: a university, college or other educational institution designated by the Lieutenant Governor in Council of a province as a specified educational institution under the Canada Student Loans Act, designated by an appropriate authority under the Canada Student Financial Assistance Act, or designated by the Minister of Higher Education and Science of the Province of Quebec for the purposes of An Act respecting financial assistance for students of the Province of Quebec.
A qualifying educational program means a program of a minimum duration of 3 consecutive weeks, in which the student must devote at least 10 hours per week and in the case of a program of an institution listed above, the program must be post-secondary. Generally, in Canada, to be considered "post-secondary", a course must offer credits leading to a degree, diploma or certificate. To take the course, you usually have to have finished high school. It is generally assumed that a course is at the post-secondary level if the Minister of Education of the province where the course is given judges that it is at that level.
A specified educational program, however, excludes a program for which the student receives any allowance, benefit, grant or reimbursement for expenses in respect of the program from a person with whom the student is dealing at arm's length.
A specified educational program is a program that would be a qualifying educational program without the requirement that a student enrolled in the program must devote at least 10 hours per week to the courses or work of the program. The facts that were submitted to us in this application is insufficient to allow us to make a final decision on the qualification of the courses you are taking as a qualifying educational program or a specified educational program.
We are of the view, however, that the term "program" used in the definition of "qualifying educational program" in subsection 118.6(1) refers to the program of study rather than to each individual course. A course offered in 3 modules with a module of 2 consecutive days per month could therefore qualify for the education tax credit under subsection 118.6(2) if the program otherwise qualifies as a qualifying educational program or a specified educational program in which the student must devote at least 12 hours per month, within the meaning of section 118.6.
If that is the case, the University must give each student enrolled in those courses a T2202A slip - Education and Textbook Amounts Certificate, recording the tuition fees paid and the number of months eligible.
Best regards,
Guy Goulet CA, M.Fisc.
for the Director
Ontario Business Income Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch