Tax Credits for Medical Residents

Those of us with family members in a medical residency program welcomed the recent technical interpretation (2015-0592051I7) issued by the Canada Revenue Agency (“CRA”).  The CRA has reversed its previous stance and will now allow an individual that is registered in a medical residency program to claim the education and textbook tax credits.  This change is a result of the decision in Kandasamy et al v. The Queen (“Kandasamy”).

The issue in the Kandasamy case was whether medical residents were allowed to claim the education and textbook tax credit.  The medical residents in the Kandasamy case were involved in a postgraduate medical residency program administered through a school of medicine at a university in conjunction with an affiliated hospital.

In order for a medical resident to claim the tax credits, a designated educational institution must issue a valid form T2202A.  CRA has indicated that this new position will be applied prospectively to 2014 and subsequent tax years for a medical resident in a qualifying educational program.  Previously CRA held the view that the medical resident was an employee in a training program and not a student in a qualifying educational program.

For more information about tax credits for medical residents and other tax services the Toronto accountants at Hogg, Shain & Scheck provide, please contact us today.