T4A Box 105: The Reporting of Scholarships, Fellowships, Bursaries, and Artists’ Project Grants

Every year, Taxtron Support Team receives numerous inquiries from students and academics regarding Box 105 on the T4A slip and why it’s not being displayed or reported on the client’s Income Tax and Benefits return. This box is specifically designated for amounts received from scholarships, fellowships, bursaries, and artists’ project grants, which are often exempt from taxable income under certain conditions.

An exempt scholarship or bursary is one that is not subject to taxation under certain conditions. For elementary and secondary school students, all scholarships and bursaries are non-taxable. At the post-secondary level, scholarships, fellowships, and bursaries are exempt from taxes if they are received for enrollment in a program that is primarily research-based and leads to a recognized degree such as a college or CEGEP diploma, or a bachelor’s, master’s, or doctoral degree. However, post-doctoral fellowships do not qualify for this exemption and are taxable.

To be eligible for the scholarship exemption, students must be enrolled in an educational program and be considered a qualifying student for the years 2022, 2023, or 2024. The exemption applies to awards received in 2023 for full-time enrollment in a qualifying program for any of the aforementioned years. It’s important to note that the exemption is limited to the portion of the award that is intended to support the student’s enrollment. Factors such as the program’s duration, the terms and conditions of the award, and the intended period of support should be considered to determine the exempt portion of the award. Full-time qualifying students can thus benefit from this exemption, provided the scholarship or bursary is aligned with the stipulated criteria.

For part-time enrollment, the scholarship exemption is limited to the tuition paid for the part-time program and the cost of program-related materials. To calculate the scholarship exemption for part-time enrollment, follow these steps:

When using TaxTron software the treatment of Box 105 is streamlined and automated. If a student was enrolled as a full-time student at their educational institution (as evident from their T2202 Form), and they clicked on “Full-time” enrollment status on the T4A screen, the software recognizes this status and any amount reported in Box 105 is automatically exempt from tax. This means that it will not be included as income on the student's tax return.

For students who attended university on a part-time basis, TaxTron will calculate the exemption based on the lesser amount of tuition paid for the part-time program and the cost of program-related materials, subtracted by the basic exemption of $500. If there is any remaining scholarship income, it will be included on Line 13010 of the student's tax return (if positive; otherwise, it's entered as "0").

For further information please contact Taxtron Support at 416-491-0333 or visit www.taxtron.ca