Principal Issues: Is a postdoctoral fellow entitled to the education tax credit under subsection 118.6(2) in respect of his or her internship?
Position: No
Reasons: A fellow is not a student.
July 7, 2008
XXXXXXXXXX Tax Services Office Headquarters Income Tax Rulings Directorate XXXXXXXXXX Attention: XXXXXXXXXX Michel Lambert, CA, M.Fisc. (613) 957-8968
2008-027596
Application of subsection 118.6(2) to postdoctoral fellows
This is further to your memorandum regarding the application of subsection 118.6(2) to postdoctoral fellows at XXXXXXXXXX.
Unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
The Facts
You provided us with a detailed description of the postdoctoral internship program at the University and we considered all of these facts in our analysis of the file. We reproduce below a brief summary of these facts.
1. A postdoctoral fellow is a person who holds a Ph.D. or equivalent (including a professional degree in a medical specialty) and who has undertaken to acquire, on a full-time basis and for a fixed period of time, complementary expertise by participating in the University's research activities.
2. To obtain the status of postdoctoral fellow, a person must satisfy the following conditions:
(a) hold a Ph.D. or the equivalent XXXXXXXXXX;
(b) be hosted by a professor who undertakes to provide a full-time internship;
(c) XXXXXXXXXX.
3. All postdoctoral fellows must be officially registered at the University. Registration must be made with the Registrar. The University issues an identity card to the fellow. The fellow's registration is renewable at each session for the duration of the internship. However, such a fellow is not registered as an undergraduate, graduate or postgraduate student.
4. A postdoctoral fellowship generally lasts for XXXXXXXXXX. It can start at any time of the year.
5. The postdoctoral fellow commits to undertake or continue research at the university in accordance with the policies and regulations in force. He or she may also contribute to the quality of training programs at all three levels of study by participating in teaching.
6. The professor who agrees to host a postdoctoral fellow undertakes to provide the fellow with support conducive to fruitful collaboration in the conduct of a research project. The professor undertakes to offer the fellow an internship aimed at acquiring more specialized or complementary research expertise.
7. At the end of their stay at the university, the fellow may receive a certificate by filling in a form to that effect. The certificate shall specify the nature, duration and location of the fellowship.
Opinion of the University Representative
8. According to the university representative, postdoctoral fellows are students entitled to the education tax credit for the following reasons:
a) The university considers the postdoctoral fellow to be in the student group. The fellow is registered as a student and the University issues the fellow a student card.
b) A file is opened in the fellow's name at XXXXXXXXXX.
c) The fellow is included in the student population for Government of Quebec grants for research facilities.
Our Opinion
9. We are of the view that where a postdoctoral fellow pursues an internship whose purpose is to acquire more specialized or complementary research expertise, the fellow is not a student for the purposes of the Act. No T2202A slip – Tuition and Enrolment Certificate should be issued to a person who is not a student enrolled in a program of study covered by the Act. The fact that the postdoctoral fellow receives a scholarship is not a determining factor as to whether a T2202A slip should be issued.
10. You bring to our attention the fact that the Quebec Ministry of Education, Recreation and Sport considers postdoctoral fellows to be students since they are recognized for the purposes of funding teaching spaces and are included in the declaration of clientele of universities. In our opinion, the fact that this Quebec ministry takes postdoctoral fellows into account for the purposes of the investment grant it awards to universities is not a fact to be considered in determining whether they are students. Furthermore, it would be difficult to rely on this fact to conclude that postdoctoral fellows are students since the Ministry itself distinguishes those postdoctoral fellows from students in the client statement that the universities must provide it with for the purposes of the grants.
11. The opinion we express here is in line with that expressed by the Commissioner of the Agency, Mr. William V. Baker sent to XXXXXXXXXX on June 24, 2008. We attach a copy of that letter.
Access to Information
12. For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
We hope that these comments are of assistance.
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.
Encl.