20 March 2003 External T.I. 2003-0003545 - ELIGIBILITY FOR TUITION TAX CREDIT

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Eligibility for the Tuition Tax Credit

Position:

XXXXXXXXXX

Reasons: General comments provided.

2003-000354
XXXXXXXXXX Renée Shields
(613) 948-5273
March 20, 2003

Dear XXXXXXXXXX:

Re: Tuition Tax Credit

This is in response to your letter of February 8, 2003 requesting clarification regarding whether studies at the XXXXXXXXXX are eligible for the tuition tax credit in section 118.5 of the Income Tax Act (the "Act").

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.

Your specific enquiry relates to the eligibility of the XXXXXXXXXX for purposes of the tuition tax credit in section 118.5 of the Act. XXXXXXXXXX does not grant a degree and does not satisfy the wording of paragraph 118.5(1)(c) of the Act. XXXXXXXXXX.

In response to your inquiry about the status of Interpretation Bulletin IT-516R2, "Tuition Tax Credit," we can advise that the CCRA issues income tax interpretation bulletins (ITs) in order to provide technical interpretations and positions regarding certain provisions contained in income tax law. While the comments in a particular paragraph in an IT may relate to provisions of the law in force at the time they were made, such comments are not a substitute for the law. Readers should, therefore, consider such comments in light of the relevant provisions of the law in force for the particular taxation year being considered, taking into account the effect of any relevant amendments to those provisions or relevant court decisions occurring after the date on which the comments were made.

Your letter references a change made to paragraphs 3(d) and 7 of IT-516R2 whereby a reference to the Canada Student Loans Act was added. These provisions are applicable to determining the eligibility of an educational institution in Canada pursuant to subparagraph 118.5(1)(a)(i) of the Act or an educational institution in the United States (and not any other country) pursuant to paragraph 118.5(1)(c) of the Act. In those provisions, the Act requires that an individual be enrolled at a university, college or other educational institution providing courses at the post-secondary level. This requirement is in contrast to that in the provision applicable to your inquiry, namely paragraph 118.5(1)(b) of the Act wherein the individual must be enrolled in a university outside Canada in a course leading to a degree.

We trust that these comments will be of assistance.

Yours truly,

Mickey Sarazin, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch