In most cases, the Canada Revenue Agency does not require students to report scholarships, fellowships, bursaries or study grants as income. However, in some cases, you may have to report all bursary amounts over $500 as income. It depends on your enrollment status, whether you can claim the education amount and the type of program in which you are enrolled.
Students Who Receive the Education Amount
If you qualify to receive the education amount and are a full-time student, you do not have to report bursaries you receive as income, as long as they don’t exceed the amount of money required to support you in your program. If you receive bursaries or scholarships that exceed that amount, you must report them as income.
Similarly, if you qualify for the education amount but are a part-time student, you do not have to claim bursaries as income, as long as their value doesn’t exceed your qualifying expenses.
The CRA only allows part-time student to consider the cost of tuition, fees and materials directly related to school, while full-time students may consider the entire cost of their program, including dorm fees or lodging expenses.
The Scholarship Exemption
As a part-time student, you also can claim an additional scholarship exemption of $500. To calculate whether you qualify for this exemption, add together all of your bursaries and scholarships and subtract your tuition, fees and course materials.
If the remainder is less than $500, you do not have to report it as income. If it is more than $500, subtract $500 and report the difference as income.
If you do not qualify for the education amount, you must report all scholarships and bursaries as income, but first, you may subtract the $500 scholarship exemption.
Amounts Not Eligible for the Scholarships Exemption
In certain cases, bursaries may not be eligible for the scholarship exemption. If you receive the bursary from your employer or someone with whom you have business connections, it doesn’t qualify for the exemption.
To qualify for the exemption, your educational program must lead to a college degree, such as a bachelor’s degree, master’s degree or a doctoral degree or a CEGEP diploma in Quebec. If you have received a bursary as part of a post-doctoral fellowship, you have to report it as income.
Filing Your Taxes
To file your taxes, you need the T4A slips from your school or the institutions that gave you your scholarships or bursaries. The payments you received appear in box 105.
Add together all of the amounts that appear in box 105 of your T4 slips. Subtract the amount needed to support you in your program or your qualifying tuition, fees and materials.
Subtract an additional $500 if you are a part-time student. Then, report the difference on line 130 of your income tax return.
If you do not qualify for the education amount, subtract $500 from your bursaries and report the rest as income on line 130.
Complete schedule 11. This schedule collects information about unused tuition and education amounts, and it calculates your eligible tuition fees, a critical calculation in determining how much of your bursary you need to report as income.