DAVID WILKENFELD, CPA, CA, canadian tax CONSULTANT

What’s Your Tax Issue? Tuition Fees

In Canadian Income Tax, Personal Tax on November 6, 2009 at 5:43 pm

The Tax Issue:

I am enrolled in a university course on an audit basis. I’m allowed to attend the lectures, and receive course material, but I do not write any exams and I get no mark. It’s half the regular fee for a course, and I’m wondering if the fee can be deducted?

The Answer:

The general rule for the tuition fee credit is that the fee must be paid to a university (or a certified post-secondary institution), must be over $100 and must cover a period of not more than 12 months. Provided these requirements are met, the CRA takes the view that fees for auditing courses are eligible for the tuition credit.

Another question arises as to whether the time spent in auditing a course would qualify  for the education credit – $400 per month for full-time and $120 per month for part-time attendance. That would probably depend on the structure of the course, and whether you would be considered to be a student attending the class. It would seem that if the tuition qualifies, then the course would also qualify for the education tax credit if your time is actually spent attending the class.

Interestingly, the tuition fee credits require hat you be enrolled in a Canadian university. The rules are a bit different for foreign universities.  Here, you must attend the university and the course must lead to a degree.

Recently, the question of attendance in a university has been the focus of some commentary. The question is, are you “attending” a university if you are taking a correspondence or online course. In the case of Valente (2006 DTC 2685) the Tax Court ruled full-time attendance can be done through the internet.

The CRA has recently published an opinion stating that a student enrolled in a university outside Canada and taking courses over the internet may be able to claim a tuition tax credit provided that student is able to demonstrate that their attendance over the internet constituted “full-time attendance”.

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