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.
Principal Issues: Whether in a given situation, a learning package that is designed for independent study and available to students online for a period of 12 months, can entitle students to the part-time education tax credit for the full 12 months, even when students complete their learning within a shorter period of time.
Position: Question of fact – Provided that all of the requirements under section 118.6 are met, a student may be eligible for the part-time education tax credit during each of the 12 months provided that the learning package was planned, at the beginning of the learning session, to run over a 12-month period.
Reasons: Previous position in document 2013-0477151E5 (F)
XXXXXXXXXX 2015-056892
Randa El-Kadi
December 24, 2015
Dear XXXXXXXXXX:
Re: Form T2202A and the Education Tax Credit
This is in response to your email of February 3, 2015, in which you request our opinion about the number of months to record on form T2202A - Tuition, Education, and Textbook Amounts Certificate, for purposes of the education tax credit (“ETC”) under section 118.6 of the Income Tax Act (“Act”).
You have indicated that your institution (the “Institution”) is certified by the Minister of Employment and Social Development Canada (“ESDC”) and meets the definition of a designated educational institution in subparagraph 118.6(1)(a)(ii) of the Act.
Based on our telephone conversation (XXXXXXXXXX/El-Kadi) of February 19, 2015, and the information provided on the Institution’s website, the Institution offers an online learning package (the “Package”) that is designed for independent study. The Package consists of XXXXXXXXXX modules, each of which is an online course that can be taken separately. The Package is a preparation program to help students prepare for exams required to obtain a professional designation. You have stated that students are expected to spend XXXXXXXXXX hours of study over a period of 12 months (on average XXXXXXXXXX hours per month). As such, students have online access to the Package for 12 months. However, some students may condense all XXXXXXXXXX hours of study in a three to four-month period, and write the exam(s) that lead(s) to the designation. If successful, such students would not require access to the Package beyond the three or four months.
For purposes of the ETC, you are asking whether the Institution can complete form T2202A to indicate 12 part-time months of enrolment, regardless of the actual number of months that students access the online Package. You also indicate that there is no requirement for students to inform the Institution as to whether they were successful in writing their exam(s).
This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.
Requirements in subsection 118.6(2)
Under subsection 118.6(2) of the Act, a part-time student may be able to claim a part-time ETC for each month in a tax year during which all of the following conditions are met:
- he student is enrolled at a designated educational institution;
- the student is enrolled in a program that is a “specified educational program;”
- the program provides that each student in the program spend not less than 12 hours per month on courses in the program; and
- the student obtains a certificate in prescribed form issued by the designated educational institution, which confirms the student’s enrolment (T2202A).
Moreover, where the designated educational institution is one that is certified by the Minister of ESDC, the following additional conditions must be met:
- the student has attained the age of 16 by the end of the year; and
- the student is enrolled in the program to obtain skills for, or improve skills in, an occupation.
The requirement for a “specified educational program”
To meet the definition of a “specified educational program” under subsection 118.6(1), a program’s duration must not be less than three consecutive weeks. However, this excludes any program in relation to a particular student if the student receives, from an arm’s length person (for example, an employer) any allowance, benefit, grant, or reimbursement in respect of the program, other than an amount received as a scholarship, bursary, or other limited exceptions. If the student’s program is excluded for any of these reasons, the student would not qualify for the ETC.
It is the Canada Revenue Agency’s (“CRA”) view that the term “program” in the definition of “specified educational program,” refers to a program of study rather than to each course individually. Whether or not this requirement is met is a question of fact.
The minimum requirement of 12 hours per month on courses
As indicated in ¶ 1.24 of Income Tax Folio S1-F2-C1, Education and Textbook Tax Credits, the 12 hours per month include lecture time and additional time spent on practical training and laboratory work. When a program falls short of providing the student with 12 hours per month of direct course instruction, a reasonable estimate of time outside the classroom or laboratory for work assignments or other items may be included for this purpose.
The requirement for enrolment as a part-time student at a designated educational institution is a separate test over and above the requirement respecting a specified educational program. Generally, the CRA will accept the designated educational institution’s classification of a student (as full-time or part-time) if the method of classification is reasonable and consistent. In the same way, the CRA will generally rely on the institution to record the relevant information on form T2202A.
An institution may issue form T2202A to part-time students for a given year if it satisfies itself that:
a) the institution meets the definition of a “designated educational institution;”
b) the student was enrolled in a program that is not less than three consecutive weeks in duration;
c) the program provides that each student in the program spend not less than 12 hours per month on courses in the program; and
d) the program is designed to allow students to obtain skills for, or improve skills in, an occupation (the last point applies only to designated educational institutions that are certified by the Minister of ESDC).
In terms of the number of months to be recorded in column B of form T2202A, it is our view that this number can be based on the projected duration of the session(s) for all students in the program of study, provided that the projected duration is reasonable.
Although a student must receive form T2202A from a designated educational institution to claim an ETC, it does not ensure the student’s eligibility for the credit.
We trust that these comments will be of assistance.
Yours truly,
Pamela Burnley, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
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