Line 130 and Scholarships

[HowIsMyFinancial]

Hi -

We got a T4A form for scholarships with box 105 for say $2,000
This was supposed to go to Line 130 but the guide is so confusing http://www.cra-arc.gc.ca/tx/ndvdls/t...lns101-170/130

The tuition fee paid for the year is say $10,000.

How am I supposed to calculate for line 130?
Feels like it supposed to be 0 because the scholarship < tuition fee paid.

Thanks

[caricole]

T4A Box 105.....2.000$

Enter on line 130 ....2.000 - 500 = 1.500 ....... 500$ being a scholarship exemption of Max 500$

Tuition fees paid:

Fill schedule 11

Total goes to schedule 1 on line 323....(to calculate your taxcredits)

Consider incometax as a sport

Lots of effort..no benefits..

[stardancer]

If you have no T2202 to go with the T4A this year, then line 130 should read $2,000 - 500 (exemption) = 1500

If you do have a T2202 to enter on schedule 11, then line 130 should read 0. If you have paid tuition in the same year as receiving the scholarship/bursary, then box 105 on a T4A is fully exempt.

If you are using a tax program this should be done automatically.

[HowIsMyFinancial]

If you have no T2202 to go with the T4A this year, then line 130 should read $2,000 - 500 (exemption) = 1500

If you do have a T2202 to enter on schedule 11, then line 130 should read 0. If you have paid tuition in the same year as receiving the scholarship/bursary, then box 105 on a T4A is fully exempt.

If you are using a tax program this should be done automatically.

Thanks that's what I am wondering. I thought i should have been 0 (I do have T2202 amounting more than $2,000).

I am using Studio Tax, they left Line 130 blank but editable and in the T4A form they say "see guide for Line 130" so I got confused.

[matlock]

Thanks that's what I am wondering. I thought i should have been 0 (I do have T2202 amounting more than $2,000).

I am using Studio Tax, they left Line 130 blank but editable and in the T4A form they say "see guide for Line 130" so I got confused.

I think your worries are due to interpreting the relationship between scholarships and tuition incorrectly: while your school might've given you the scholarship to offset your tuition, the amounts really have nothing to do with each other for tax purposes.

Many doctoral students get between $20-50k/yr in scholarships or research grants (plus, e.g., $10k/yr in teaching assistantships), pay only $5-10k in tuition, and yet pay no income tax whatsoever. The only taxable part of their income is the assistantship, but it almost always exempt, especially once tuition is factored in. What this means is that some students actually net more per year than the assistant professors who teach them: the scholarship amount from their T4As is simply not included on their T1, whether prepared manually or with an online tax package.

The reason Studio Tax refers you to the guide for Line 130 is so that you can read the CRA's explanation on this matter... though neither Studio Tax nor the CRA points out just how counterintuitive the whole thing is (i.e., "Why bother giving me a T4A if it is completely irrelevant to my taxes?")

[ghostryder]

... though neither Studio Tax nor the CRA points out just how counterintuitive the whole thing is (i.e., "Why bother giving me a T4A if it is completely irrelevant to my taxes?")

Because there is no way the educational institution issuing the T4A can know if you are eligible to claim the education amout. If you are not eligible for the education amount, you have to report the T4A amount on line 130, minus the $500 exemption.

[matlock]

Retracted.

[ghostryder]

I guess only the vast majority of educational institutions will issue T4As and T2202s to the same individual and can tell from the very fact of issuing the latter that the individual qualifies for the education amount.

Completely and utterly false. The T2202 only provides the information you need to calculate the tuition & education amounts IF you are eligible. Please see 118.6 of the Income Tax Act. Specifically the definition of a "qualifying educational program".


For example, if you are getting an allowance or reimbursement for tuition or other expenses from your employer (other than the school) for the educational program you are taking, you ARE NOT eligible for the education amount. And since there is no way the school could know whether or not you are receiving payments like this, they would still issue a T2202.