Dear Sirs:
This is in reply to your letter of December 17, 1990 asking if the tuition tax credit can be claimed in respect of certain fees paid to an educational institution.
As we understand your situation, school fees are due to be paid to a private school in February, July, and November of each year. In September, 1988, the school introduced an advanced course into its curriculum. It is your view that this course is a post-secondary course. You have therefore asked whether all tuition fees paid to the school in 1988 are eligible for a tuition tax credit under subparagraph 118.5(1)(a) of the Income Tax Act, regardless of whether a particular student was enroled during the time period when the advanced course was being provided.
Our Comments
Without complete details of the content and enrolment in the advanced course and the name of the school, we cannot confirm whether the course in question is, in fact, a course offered at a post-secondary level. Should you wish information in this regard, you should contact your local District Taxation Office. However, the following general comments may be of assistance to you.
Where a student is enroled in a school at a time in a taxation year when the school is providing the post-secondary course, fees paid by that student for all courses in respect of the year would qualify for the tuition tax credit. On the other hand, where a student is only enrolled in the school for part of a taxation year and the school was not providing the post-secondary course at any time during that part of the taxation year, tuition fees paid to the school would not qualify for the tuition tax credit.
In July, 1990, the Honourable Michael H. Wilson, Minister of Finance, released details of draft amendments to the Income Tax Act which, among other things, would restrict the transfer of tax credits for tuition fees under subsection 118.5. Clause 91 of those amendments, if enacted in its present form, will be effective for tuition fees relating to a period after June, 1990.
We trust our comments are of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch