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: Given the recent amendment to the scholarship exemption, is it still necessary for the payor of a scholarship or bursary to issue a T4A slip?
Position: Yes
Reasons: Not all scholarships or bursaries will be completely exempt. Furthermore, the obligation to issue a T4A is contained in subsection 200(2) of the Regulations and applies irrespective of the taxability of the amount in the hands of the student.
2008-026681
XXXXXXXXXX Renée Shields
(613) 957-2049
February 19, 2008
Dear XXXXXXXXXX :
Re: Requirement to issue T4A slips for scholarships
This is in response to your letter of January 18, 2008 inquiring whether the payor of a scholarship or bursary must still issue a T4A slip, in light of recent amendments to the provision of the Income Tax Act (the "Act") relating to the scholarship exemption.
We note that not all scholarships or bursaries will be eligible for a complete scholarship exemption. A particular student must meet the conditions in subsection 56(3) of the Act and a full exemption is only available if the scholarship is received in connection with the student's enrolment in a program for which he or she is eligible for the education tax credit. More information about this credit can be found in Interpretation Bulletin IT-515R2, "Education Tax Credit" and in Guide P105, entitled "Students and Income Tax." These publications can be found on the Canada Revenue Agency website at www.cra-arc.gc.ca.
We can confirm that the requirement for the payor of a scholarship or bursary to issue a T4A slip is imposed by subsection 200(2) of the Income Tax Regulations. This obligation exists irrespective of the taxability of the amount in the hands of the student.
We hope the above comments are of assistance.
Yours truly,
Renée Shields
for Director
Business and Personal Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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