24 November 2011 External T.I. 2011-0397811E5 - Issuance of T4A's

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: 1. Who is responsible for issuing the T4A for educational assistance.

Position: 1. The Payer is responsible for issuing the T4A.

Reasons: 1. Requirement under Reg. 200(2).

XXXXXXXXXX 				2011-039781
					Robert Dubis
November 24, 2011

Dear XXXXXXXXXX :

We are replying to your e-mail of March 2, 2011 regarding the responsibility for issuing T4A's for student's where funds are received in respect of a student's tuition from third parties.

Pursuant to paragraph 200(2)(a) of the Income Tax Regulations, every payer of a research grant, scholarship, fellowship, bursary or prize (other than a prescribed prize) must file a T4A Summary and related T4A Supplementaries to report such amounts. An educational institution may issue the T4A slip as agent on behalf of the party funding the award. If there is no agency relationship, the funding party is required to issue the T4A slip or other appropriate information return.

Generally, when the payor of an amount informs the university that the payment is intended as a scholarship, regardless of whether or not the payor names the recipient, the university can rely on that statement in good faith and issue a T4A to the recipient student. There could be exceptions, such as where a purported scholarship is abnormally large, or the recipient is not a student at the university, but these should be rare.

A T4A is not conclusive proof of how the amount is to be treated for tax purposes. The payor and payee are still jointly responsible for accurately reporting all income received as an employee or owner. It is not normally the responsibility of the university to verify the representations they make to it in respect of these payments.

Where the university has ascertained that it has made an error, it may amend or cancel any issued T4A slips. See Guide RC4157 Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary which is available on the CRA webpage for further information.

We trust that the information provided is helpful.

Yours truly,

Sharmini Ratnasingham
Assistant Director
for Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch