DAVID WILKENFELD, CPA, CA, canadian tax CONSULTANT

What’s Your Tax Issue? Exam Fees

In Canadian Income Tax, Personal Tax on April 18, 2012 at 1:44 pm

The Tax Issue

I am a physician doing my residency at McGill Unversity. Last year, I paid $3725.00 to the Royal College of Physicians and Surgeons in respect of exam fees required for my professional designation. I have a very official looking receipt but I’m being told that these fees may not be deductible. I’m getting different opinions everywhere. Do these fees qualify as tuition for tax purposes?

The Answer

Prior to 2011, the short answer was no. Only exam fees paid to a an educational institution were considered eligible for the tuition tax credit. As a small consolation, the CRA did suggest that if you are a self-employed professional, the exam fees might qualify as an eligible capital amount if they are paid in respect of your business or profession.

However, the 2011 federal budget contained amendments that will allow examination fees paid to a professional association, provincial ministry, or other institution for an examination required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified to to practice a trade or profession in Canada. These amendments apply to examinations taken in 2011 and subsequent taxation years.

 

  1. Hi Dave

    Sorry to disagree but I think he can deduct it. This was a measure in the 2011 budget. The web site says the payment can be to a “professional association” – which should qualify the RCPS.

    http://www.cra-arc.gc.ca/gncy/bdgt/2011/qa05-eng.html

    • Yes, Puneet, you are correct. I have edited the post. Thanks for being so attentive and setting me straight!!

  2. […] post has been corrected and my thanks go out to my attentive readers for pointing this out. ▶ No Responses /* 0) { […]

  3. Can you tell me which line you should use to enter your exam fees? I called CRA and the woman I spoke to didn’t know.

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