Principal Issues: If an individual received reimbursement from their employer for one of four courses taken at a designated educational institution, can the "program" consist of the remaining three courses that will allow the individual to claim the education and textbook tax credits.
Position: No, the program consists of all the courses and work at a designated educational institution during the year. Since the individual received reimbursement for one of the courses, they cannot claim the education and textbook tax credits on the remaining courses in which no reimbursement was received.
Reasons: The definition in subsection 118.6(1) of a "qualifying education program"
January 7, 2011
Sudbury Tax Services Office HEADQUARTERS
Louise Fontaine Ann Townsend, CMA
Appeals Division 905-721-0184
2010-038491Education and Textbook Tax Credits
I am writing in response to your email dated October 26, 2010, requesting clarification on the meaning of "program" vs "courses" when determining entitlement to the Education and Textbook Tax Credits. In the situation you have described, the taxpayer was enrolled in a particular program which consisted of four courses at a Canadian university to obtain CGA equivalent courses required for employment. The taxpayer received reimbursement for one of the four courses from his employer and you are asking if the taxpayer is entitled to claim the Education and Textbook Tax Credits for the other three courses in which no reimbursement was received and which took five months to complete.
OUR COMMENTS
All statutory references in this letter are references to the provisions of the Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, as amended (the "Act").
Subsections 118.6(2) and (2.1) allows an individual to claim the Education and Textbook Tax Credits for each month in a taxation year during which the individual was enrolled in a "qualifying educational program" as a full-time student, or in a "specified educational program" as a part-time student. The Education Tax Credit is calculated under subsection 118.6(2) and is 15% of the education amount, which is currently $400 per month for full-time study and $120 per month for part-time study. The Textbook Tax Credit is calculated under subsection 118.6(2.1) and is 15% multiplied by $65 for each month in the taxation year in which the individual was entitled to claim the education tax credit as a full-time student, or $20 for each month in the taxation year as a part-time student.
A "qualifying educational program" is defined in subsection 118.6(1). This definition states that it does not include a program if the student receives any allowance, benefit, grant or reimbursement for expenses in respect of a program from a person with whom the student was dealing at arm's length, such as an employer.
In your case, the taxpayer was enrolled in four CGA equivalent courses at a "designated educational institution" and received reimbursement from their employer for one of these courses. The program consists of these four courses and since the taxpayer received
reimbursement for one of the courses within the program, the program does not meet the definition of a qualifying educational program. Therefore, the taxpayer is not eligible to claim the Education or Textbook Tax Credits.
We trust these comments are helpful.
Yours truly,
Guy Goulet CA, M.Fisc.
A/Manager
for Acting Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch