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Scholarships and Awards

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Filing Your Return - Students -> Income from scholarships and awards

Line 130 Income From Scholarships and Awards

Income Tax Act s. 56(1)(n), 56(3)

For all provinces and territories except Québec, starting with the 2006 taxation year, scholarship, bursary and fellowship income is fully exempt from tax when the income is received in connection with a program for which the student will get an education amount tax credit.  The income is not reported on the tax return.

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If you are not eligible to claim the education amount, then only the first $500 of awards is tax free.  Amounts received in excess of $500 are reported on line 130 of your tax return.  Taxable amounts would be reported in the Other Income line in the Canadian Income Tax Calculator.

Starting with the 2007 tax year, when you receive a scholarship, bursary, or tuition for post-secondary education from the employer of a family member, you will receive a T4A slip from the employer.  Previously, this income was taxable to the employee instead of to the employee's family member who received the income.  When scholarships, bursaries, or tuition are provided for elementary or secondary school, the fair market value (FMV) of these benefits are still a taxable benefit to the employee.

Québec students

Québec students should enter the scholarship, bursary or other financial assistance amount from box O of the RL-1 slip on Line 154 of the Québec personal income tax return.  These amounts will be identified with the code RB in the "Code (case O)" box of the RL-1 slip.  Note that you can claim a deduction of the same amount on line 295.  See Scholarships and Bursaries on the Revenu Québec website topic Line 154 - Other Income.  In the Québec Income Tax Calculator, the scholarship/bursary amount would be entered in Other Income - QC and again in Other Deductions - QC.  For amounts that are taxable federally, the amount would also be entered in Other Income - Federal.

Federal 2010 Budget Changes

Budget measures implemented:

bullet clarification that post-doctoral fellowships will be taxable.  A post-secondary program consisting primarily of research will only be eligible for the education tax credit and the scholarship exemption if it leads to a college or CEGEP diploma, or a bachelor, masters or doctoral degree or equivalent.
bullet an amount will be eligible for the scholarship exemption only to the extent that it is received in connection with enrolment in an eligible educational program for the duration of the period of study related to the scholarship.
bullet the scholarship exemption will be limited, in the case of part-time programs, to the amount of tuition paid for the program plus the costs of program-related materials.  There would be an exception to this for a student entitled to the disability tax credit, or a student whose medical or physical impairment prevents them from being enrolled on a full-time basis.

These measures apply to the 2010 and subsequent taxation years.

See also Tax Information for Students.

Canada Revenue Agency (CRA) resources:

bulletS1-F2-C3: Scholarships, Research Grants and Other Education Assistance - this income tax folio was published on March 28, 2013 in consultation format to allow feedback from the tax community.
bullet IT470R para. (18) to (22) re employer-paid educational costs
bulletLine 130 - Other income - Scholarships, fellowships, bursaries, and artists' project grants
bullet Scholarships, bursaries, tuition, and training - re payments made for employees or their family members

 

Revised: March 07, 2014

 

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