Scholarships – Family Members

JANUARY 30, 2015

Did you know that a scholarship provided by an employer to arms length employee’s family members may be excluded from the income of an employee, provided that the scholarship is not provided in lieu of salary?

Scholarships paid to family members should be reported on a T4A slip for the recipient.

The taxation of a scholarship or bursary received by the family member may be excluded from income on their return provided certain scholarship criteria are met.

The deductibility to the company will depend on whether the scholarships are found to be paid in lieu of salary, or not.

More information on employer provided scholarships, including those paid to employees can be found at S1-F2-C3 (http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f2/s1-f2-c3-eng.html). Contact FORT Group to assist in setting up these scholarships for employees and their families.

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