How Scholarships Are Taxed in Canada: The T4A Slip and the Full Time Exemption

Where scholarship income shows up on your tax return

A Canadian college or university reports scholarship, fellowship, bursary, and artist's project grant income in box 105 of a T4A slip , according to the Canada Revenue Agency. Getting a T4A with an amount in box 105 does not automatically mean you owe tax on it. Whether any of it becomes taxable depends on whether you count as a qualifying student and whether you studied full time or part time.

You transfer the taxable portion, if any, to line 13010 of your T1 return. If your scholarship exemption covers the full amount, line 13010 stays at zero even though your T4A still shows the full award in box 105.

The full-time exemption: usually zero tax

If you are a qualifying student enrolled full time in a post-secondary program at a designated educational institution, the CRA's scholarship exemption generally covers the full amount of scholarship, fellowship, and bursary income you receive for that program. The exemption applies when you attended the program in the tax year itself, the year before, or the year after, so a scholarship paid out shortly before or after your enrolment year still qualifies.

The exemption is not unlimited in every case. The CRA limits it to the amount reasonably intended to support your enrolment in that specific program, so an award clearly tied to your degree normally clears this bar without trouble. For most full-time students receiving a standard entrance or in-course scholarship, this means no tax owed on that money.

What counts as a qualifying program

The exemption depends on enrolment in a qualifying educational program, defined by the CRA as a program lasting at least three consecutive weeks where you spend at least 10 hours a week on courses or program-related work, including lectures, lab time, practical training, or thesis research. See the CRA's definitions for education and textbook amount page for the exact wording.

Part-time students get a smaller exemption

Studying part time changes the calculation. The CRA's part-time scholarship exemption only covers tuition fees you paid to the institution plus the cost of program-related materials for the part-time program you are enrolled in. It does not extend to your general living costs the way the full-time exemption effectively does. If your award exceeds your fees and materials, the extra amount becomes taxable income on line 13010.

Say you study part time and receive a $4,000 bursary in one tax year, while your tuition and required materials for that term total $2,600. Under the part-time exemption, $2,600 is exempt. The remaining $1,400 counts as taxable scholarship income on line 13010 for that year.

If you are not a qualifying student

If you received a T4A with an amount in box 105 but do not meet the qualifying student conditions, only the first $500 of your total scholarship, fellowship, and bursary income for the year is exempt. Report anything above that $500 basic exemption on line 13010 as taxable income.

Elementary and secondary school awards sit outside this system entirely. Scholarships and bursaries paid to elementary or secondary school students are not taxable, and the school does not issue a T4A slip for them.

What to do with your T4A

Check box 105 on every T4A you receive and confirm whether you were a full-time or part-time qualifying student for the period the award covered. If you were full time, your exemption normally zeroes out line 13010, but keep the T4A on file since the CRA sometimes requests proof that the award supported your enrolment.

If you were part time, add up your tuition fees and required materials for that program and compare the total against your award. Anything above that combined figure goes on line 13010 as taxable income. If several T4A slips arrive from different scholarships in the same year, add all box 105 amounts together before applying the $500 basic exemption for any award that does not qualify for the full or part-time exemption.

Do not confuse this with employment income

A research assistantship or teaching assistantship paid to you as employment shows up on a T4, not a T4A, and counts as regular employment income. The scholarship exemption does not touch that income at all, since it was never scholarship or fellowship money to begin with. Check which slip you received, a T4 or a T4A, before you assume the exemption applies to a given payment from your university.

Some graduate funding arrives as a mix of both: part scholarship or fellowship reported on a T4A, part paid research or teaching work reported on a T4. Treat each slip separately when you file, since the scholarship exemption rules in this guide only apply to the T4A portion.