1- Income

Main sources of income for students include scholarships, research grants, training allowances, and RESP payments.

Scholarships

A scholarship is an amount granted to a student to help him/her continue studying and includes any amount received as a bursary or fellowship. A scholarship also includes reimbursements or allowances to pay education-related costs, such as lodging, travel, supplies, textbooks or materials as well as benefits in kind, such as free housing or materials. Usually, a student does not have to do any specific work in exchange for such an award. An artist’s project grant or an award for outstanding work in the student’s regular field of endeavour is also considered a scholarship.

Federal

Scholarships received by a primary or secondary school student, like those received by a student registered in a study program leading to a college or CEGEP diploma or a bachelor, master or PhD degree (or equivalent) are not taxable. Certain limits may apply if the student is registered part-time in a program.

For all other scholarships, there is a $500 exemption. Awards for achievements in the arts, sciences or public service (e.g. Governor General’s literary award or other public recognition awards) are completely tax-free.

Quebec

In Quebec, scholarships and awards are not taxable and are not subject to the 1% contribution to the HSF. The amounts received are included in income and are then subject to a corresponding deduction in the calculation of taxable income. These scholarships, although non-taxable, are included in the calculation of earned income for the purposes of the child care expense tax credit and the dependant tax credit that may be claimed by a parent in respect of that student

Program Offered by an Employer

Expenses paid or reimbursed by an employer in connection with a program enabling an employee’s family members to undertake studies may, under certain conditions, be considered for a scholarship received by the student rather than a taxable benefit received by the employee. In Quebec, such treatment is only available as financial aid for post-secondary studies.

Research Grants

Research grants are taxable. However, taxpayers can deduct reasonable travelling expenses (meals, lodging, travelling) for working out of town, fees paid to assistants, the cost of equipment and laboratory fees up to the amount of the grant.