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: Are status Indians taxable on post-secondary education assistance received from INAC?
Position: The CRA will continue to treat such amounts as tax-exempt and there is no requirement to issue a T4A slip
Reasons: The Government of Canada has undertaken a review of Aboriginal policies including PSE assistance. In light of the current legal and policy uncertainty, the admin position will continue.
Signed on September 26, 2005
XXXXXXXXXX
Dear Minister:
Thank you for your correspondence of December 3, 2004, co-signed by the XXXXXXXXXX, regarding the possible taxation of post-secondary education assistance received by First Nations students. This much-delayed response permitted this important matter to receive a full review. I trust you will excuse the delay in light of this.
You express concern that reporting the post-secondary assistance paid to First Nations students on a T4A slip could have a detrimental impact on their decision to enrol in post-secondary studies.
For many years, the Canada Revenue Agency (CRA) understood that Indian and Northern Affairs Canada (INAC) paid post-secondary education assistance to Status Indians pursuant to a treaty obligation and were therefore tax exempt. In recent years, the basis for this position has been questioned.
Following the April 19, 2004 Canada-Aboriginal Peoples Roundtable, the Government of Canada has undertaken a comprehensive review of Aboriginal policies, including post-secondary education assistance for Aboriginal students.
Given the uncertainty surrounding the legal and policy framework for post-secondary education assistance paid to Status Indians under the INAC program, the CRA will continue to treat this assistance as tax exempt. As such, First Nations will not be required to issue T4A slips in respect of these amounts and Status Indian students will not have to report these amounts as income on their tax returns.
I appreciate the opportunity to address your concerns and assure you that the Government of Canada remains committed to working with the Assembly of First Nations regarding this and other issues.
Yours sincerely,
The Honourable John McCallum, P.C., M.P.
Renee Shields
948-5273
2005-010962
August 5, 2005
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