The Canada Revenue Agency has updated two child-related tax folios to reflect changes to legislation and tax credits.
Folios S1-F2-C1, Qualifying Student and the Education and Textbook Tax Credits and S1-F3-C1, Child Care Expense Deduction were updated as of Dec. 12, 2018. While the changes are minor, the folios as a whole provide guidance for clients who are parents, students or parents of students.
Education credit folio changes
Budget 2017 redefined the terms “qualifying student” and “qualifying education program” for tax years 2017 and onward, and the revised folio reflects those changes. The definitions now include people enrolled in universities, colleges and other educational institutions in Canada for occupational skills courses not at the post-secondary level.
The CRA reiterates in the folio, however, that post-doctoral fellows do not meet the requirements of the definition of a qualifying student, seeing them as similar to articling students and apprentices. As a result, “the compensation received by post-doctoral fellows is generally taxable.”
Another notable change is that nurse practitioners may now certify whether people have mental or physical impairments that prevent them from enrolling as full-time students. This amendment applies to certifications made after Sept. 7, 2017.
Child care deduction folio changes
This folio expands the meaning of “child” to include a spouse or common-law partner of a child of the taxpayer. It also specifies that the children’s arts and fitness tax credits, which were eliminated for tax years 2017 onward, apply only to 2016 and earlier.
As in the education credit folio, the document now notes that after Sept. 7, 2017, nurse practitioners may now certify whether people have mental or physical impairments. As explained in the child care folio, nurse practitioners may certify that a lower-income supporting person is incapable of caring for children because of that person’s mental or physical infirmity.