Principal Issues: Whether courses taken over the internet from a foreign university qualify for the tuition tax credit
Position: No
Reasons: Paragraph 118.5(1)(b) requires a student to be in full-time attendance, which we interpret to mean physical attendance.
Signed on March 1, 2005
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable John McCallum, Minister of National Revenue, has asked me to reply to your correspondence of December 7, 2004, regarding the possibility of claiming income tax credits for the cost of courses you took over the Internet from a foreign university in 2002 and 2003.
The Income Tax Act provides that tuition fees for courses taken at a university outside Canada will only qualify for purposes of the tuition credit if, among other things, the student was in full-time attendance at the particular institution. This requirement can only be met if a student physically attends the particular university and would not be met by a student taking courses over the Internet only. The Tax Court of Canada's decision in James A. Krause v. The Queen, which you refer to in your letter, does not affect this position since the case was heard under the informal procedure of the Tax Court and, therefore, cannot be used as a precedent for any other case.
Although you are not entitled to the tuition tax credit for the cost of the foreign university courses you took over the Internet in 2002 and 2003, you may be entitled to the education tax credit for those years. In general terms, to qualify for this credit, you must have been enrolled in a qualifying educational program at the university in courses of not less than 13 consecutive weeks that lead to a degree. You can find additional information concerning the rules for the education tax credit and the tuition tax credit in interpretation bulletins IT-515R2, Education Tax Credit, and IT-516R2, Tuition Tax Credit. The bulletins are available on the CRA Web site at www.cra.gc.ca.
If you believe you qualify for the education tax credit, you should submit Form T1-ADJ, T1 Adjustment Request, or a letter outlining your request for an adjustment, along with completed Form TL11A, Tuition Fees and Education Amount Certificate - University Outside Canada, to the Individual Client Services and Benefits Division of your tax centre.
I appreciate the opportunity to respond to your concerns on this important issue.
Yours sincerely,
Ed Gauthier Deputy Assistant Commissioner Tax and Regulatory Affairs Policy and Planning Branch
c.c.: Minister's Office
Political Assistant
James Gibbons
957-9226
2004-010833
February 11, 2005