Transcript - International Students and Income Tax, Segment 9: Scholarships, fellowships, and bursaries

Host: Welcome to the segment called Scholarships, fellowships, and bursaries, part of the International Students and Income Tax video.

This segment mentions links where you can get more information. You can find all these links in the Related links for this segment.

With me is Nicole Bélanger. Welcome Nicole. 

Subject matter expert: Thank you, Sarah.

Host: So are school awards, such as scholarships and bursaries, considered income?

Subject matter expert: Elementary and secondary school scholarships and bursaries are not considered income, and are not taxable.

Post-secondary scholarships, fellowships, and bursaries are generally not taxable if you receive them for your enrolment in a program that entitles you to claim the full-time education amount.

Post-doctoral fellowships, on the other hand, are taxable.

Host: What is the education amount, and are all international students eligible?

Subject matter expert: The education amount is a fixed amount based on the number of full-time and part-time months that a student is attending a post-secondary institution.

If you are an international student and are considered a resident for tax purposes, you can claim the education amount.

If you're a non-resident, you will only be eligible for the education amount if 90% or more of your income for the year is from Canadian sources.

Host: So, if I am not eligible for the education amount, will I be subject to tax on the full value of the scholarship?

Subject matter expert: Not quite. If you're not eligible for the education amount, you might be subject to tax on the part of your scholarship, fellowship, or bursaries that is more than $500. The first $500 is the basic scholarship exemption. Enter only the amount that is more than $500 on line 130 of your income tax and benefit return.

You will find more information on how to calculate the scholarship exemption amount in the CRA video series called Canadian Students and Income Tax.

The CRA's income tax folio S1-F2-C3, Scholarships, Research Grants and Other Education Assistance, and pamphlet P105, Students and Income Tax both contain information on this topic.

Host: Let's say I'm an international student, I've received a scholarship, and I can claim the education amount. Do I still have to report my scholarship?

Subject matter expert: No. Since you're entitled to the education amount, your scholarship is not taxable.

Host: Do tax treaties provide any deductions for scholarships, fellowships, and bursaries?

Subject matter expert: Yes, some countries, like China, have an article in their tax treaty with Canada that pertains to scholarships, fellowships, and bursaries.

Host: What other types of relief do tax treaties provide for students?

Subject matter expert: In most cases, if you were a resident of a treaty country such as China immediately before visiting Canada and are in Canada only to study, then, generally, any payments you receive for your maintenance, education, or training are not taxable in Canada.

However, if you decide to get a job while you're in Canada, this provision may no longer apply. Only certain countries like China have this provision in their treaty.

Review your country's tax treaty to find out more about the tax relief provisions that are available to you.

Host: My country has a tax treaty with Canada. Where would I report any scholarship, bursary, or fellowship income on my return? 

Subject matter expert: Report this income on line 130 and claim the treaty deduction when it applies on line 256.

Host: How do I find out about my country's tax treaty?

Tax treaties can be found at www.cra.gc.ca/treaties. When you review your country's tax treaty, look at article 19 where information about students is usually found.

Host: I've heard that tax treaties can be difficult to read. Where can I call to get help understanding the tax treaty?

Subject matter expert: For more information, contact the International Tax Services Office. The address and telephone numbers are on the CRA website.

Host: Thank you, Nicole.

This concludes the segment called Scholarships, fellowships, and bursaries, part of the CRA's International Students and Income Tax video.

Thank you for watching.

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