Tax Court of Canada Rules that Tuition Credit for "Commuting" Does Not Apply to Online Courses

The Tax Court of Canada has ruled that completing online courses through a US educational institution does not constitute "commuting" for the purpose of qualifying for Canada's tuition tax credits. The appellant, Christine Wellington, appealed an assessment of her income tax for 2001 arguing that she was wrongly denied a tax credit for tuition fees to a Chicago-based university for an online course. The main issue was whether an individual who pursues a course at a distant university by interaction though the Internet "commutes" to that university under Canada's Income Tax Act (the Act). The appellant argued that the word "commute" had evolved to include "telecommute" and that the "spirit and intent" of the Act supported her position. The Tax Court disagreed and ruled that completing courses via the Internet, or "telecommuting", does not form part of the definition of "commute." In the Court's view, the word "commute" requires physical movement back and forth between Canada and the educational institution in the US. As a result, the appellant did not meet the condition under section 118.5(1)(c)(ii) of the Act requiring her to "commute" to the educational institution in the US to qualify for the tuition tax credit. In closing, the Court commented that the Internet has transformed the nature of education and work and that it might be appropriate for Parliament to re-examine the provision to reflect this transformation. For a copy of the case, Wellington v The Queen, visit: http://decision.tcc-cci.gc.ca/en/2004/html/2004tcc313.html Summary by: Nicholas Wong