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.
Principal Issues: Whether certrain amounts paid to Seminarians to enable them to pursue their studies for the priesthood would represent scholarships or bursaries.
Position: Yes, the Archdiocese of XXXXXXXXXX should be issuing T4A slips to the Seminarians showing the amounts of scholarships or bursaries paid.
Reasons: Paragraph 56(1)(n) of the Income Tax Act (the "Act") provides that "there shall be included in computing the income of a taxpayer " the total of all amounts ... received by the taxpayer ... as or on account of a scholarship, fellowship or bursary" which exceeds the taxpayer's scholarship exemption computed under subsection 56(3) of the Act. Based on the definition of "scholarships and bursaries" contained at paragraph 6 of Interpretation Bulletin, IT-75R4, it is our view that the above amounts received by the Seminarians to enable them to pursue their studies for the priesthood would represent scholarships or bursaries within the meaning of paragraph 56(1)(n) of the Act.
Paragraph 47 of IT-75R4 states that "Under subsection 200(2) of the Regulations, every payer of a research grant, scholarship, fellowship, bursary or prize (other than a prescribed prize) must report the amount on a T4A Statement of Pension, Retirement, Annuity and Other Income". Accordingly, it is our view that the Archdiocese of XXXXXXXXXX should be issuing T4A slips to the Seminarians showing the amounts of scholarships or bursaries paid.
June 7, 2005
XXXXXXXXXX Tax Services Office HEADQUARTERS
XXXXXXXXXX Charles Rafuse
Senior Business Services Agent 613-957-8967
Business Enquiries Unit
2005-012136
Scholarships or Bursaries
This is in reply to your fax of March 15, 2005, requesting our views on whether or not certain payments made to men studying to become Roman Catholic priests (Seminarians) would represent scholarships or bursaries and should be reported on T4A slips.
Specifically, you have indicated that the Archdiocese of XXXXXXXXXX pays to the Seminarians their tuition, room and board, and two return air fares per year. For those who do not compete the studies, there is no requirement to repay the money and they are under no further obligation to the Archdiocese.
Paragraph 56(1)(n) of the Income Tax Act (the "Act") provides that "there shall be included in computing the income of a taxpayer " the total of all amounts ... received by the taxpayer ... as or on account of a scholarship, fellowship or bursary" which exceeds the taxpayer's scholarship exemption computed under subsection 56(3) of the Act. Based on the definition of "scholarships and bursaries" contained at paragraph 6 of Interpretation Bulletin, IT-75R4, it is our view that the above amounts received by the Seminarians to enable them to pursue their studies for the priesthood would represent scholarships or bursaries within the meaning of paragraph 56(1)(n) of the Act.
Paragraph 47 of IT-75R4 states that "Under subsection 200(2) of the Regulations, every payer of a research grant, scholarship, fellowship, bursary or prize (other than a prescribed prize) must report the amount on a T4A Statement of Pension, Retirement, Annuity and Other Income". Accordingly, it is our view that the Archdiocese of XXXXXXXXXX should be issuing T4A slips to the Seminarians showing the amounts of scholarships or bursaries paid.
We trust this information is helpful.
Charles Rafuse
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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