14 May 2002 Internal T.I. 2003-0015707 - SCHOLARSHIP PAID TO STATUS INDIAN T4A

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

Should a T4A be issued for educational assistance amounts paid to a status Indian even if the amount is tax exempt?

Position: Yes

Reasons:

Paragraph 200(2)(a) of the Regulations requires the issuance of an Information Return when a person confers a scholarship or bursary. There is no exception for the situation in which the amount is tax exempt.

				May 14, 2003

	NORTHERN B.C. AND YUKON TSO		HEADQUARTERS
				Income Tax Rulings
	Attention:  Betty Reid			  Directorate
				Renée Shields
(613) 948-5273

				2003-001570

T4As for Education Assistance Paid to Status Indians

This is in response to your question whether T4A slips should be issued when education assistance (scholarships, bursaries, fellowships or prizes for achievements in a field of endeavour) is paid to or on behalf of a status Indian.

Comments

Paragraph 200(2)(a) of the Income Tax Regulations (the "Regulations") states as follows:

Every person who makes a payment as or on account of, or who confers a benefit or allocates an amount that is,

(a) a scholarship, fellowship or bursary, or a prize for achievement in a field of endeavour ordinarily carried on by the recipient thereof (other than a prize prescribed by section 7700)...

shall make an information return in prescribed form in respect of such payment or benefit...

The determination of whether education assistance paid is considered tax exempt for purposes of the Income Tax Act is always a question of fact. This determination does not affect the reporting requirements under paragraph 200(2)(a) of the Regulations. Consequently, the payer of the education assistance remains obligated to issue the information return (i.e. the T4A) whether or not the education amount is taxable. This requirement has been confirmed with representatives of the Assessment and Collections Branch.

We trust that these comments will be of assistance.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Customs and Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of a taxpayer. Should your client request a copy of this memorandum, they can be provided with the electronic library version, or they may request a severed copy using the Privacy Act criteria, which does not remove client identity. You should make requests for this latter version to Mrs. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.

Mickey Sarazin, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch