7 July 1997 External T.I. 9705815 - 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 Department.

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

Principal Issues:

There is no technical issue. The problem relates to Employment Insurance Act claimants who are not entitled to claim the tuition tax credit even if they have been issued a receipt for income tax purposes. The letter has, accordingly, been referred to operations branch.

Position:

Reasons:

Human Resources
Development Canada
140 Promenade du Portage 970581
Phase IV, 3rd Floor M. Eisner
K1A OJ9

Attention: Claude Headley

July 7, 1997

Dear Sirs:

Re: Reimbursement of Tuition

This is in reply to your letter of February 24, 1997, concerning the above-noted subject.

In your letter, you referred to subparagraph 56(1)(a)(iv) of the Income Tax Act (the Act) which deals with payments made under the Employment Insurance Act (EIA). Under that subparagraph, a payment relating to the cost of a course or program that is designed to facilitate the re-entry into the labour force of a claimant under the EIA, is not required to be included in income. In relation to this income exclusion, you have referred to situations where some individuals pay their own tuition fees to an educational institution while, in other cases, the tuition fees are paid directly to the educational institution by your Department. You are mainly concerned about the situations where a claimant under the EIA is in receipt of a non-taxable receipt under subparagraph 56(1)(a)(iv) of the Act, has paid the tuition fees and has a valid tuition receipt (T2202).

It is our opinion that subparagraph 118.5(1)(a)(iii.1) of the Act does not allow the individuals to claim the tuition tax credit in respect of the fees. In order that arrangements be made with your Department to furnish us with information on EIA claimants who have paid their tuition fees directly to the educational institution, we have forwarded a copy of your letter and this reply to our Assessment of Returns Directorate. Should you wish information on the status of your letter you may call Ms. Lisa Richardson (957-9339) at that Directorate.

We trust you will find the foregoing satisfactory.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch