Education Tax Credit Canada

Starting with the taxation year, scholarship, bursary and fellowship income is fully exempt from tax when the income is received in connection with a program for which the student will get an Education Tax Credit. The income is not reported on the tax return.

If you are not eligible to claim the education tax credit, then only the first $500 of awards is tax free. Amounts received in excess of $500 are reported on line 130 of your tax return.

Prior to 2006, if you were eligible to claim the education amount, then the first $3,000 of scholarships, fellowships, bursaries, study grants and artists’ project grants were not taxable. Your T4A slips reported the total scholarships or awards. You totalled the T4A slips, then reported this total less $3,000 (or zero if your awards total less than $3,000) on the tax return.

The education amount tax credit can be claimed for each whole or part month in which you were enrolled in a qualifying program at a designated educational institution. The educational institution must provide either a T2202 Education and Textbook Amounts Certificate, or a T2202A Tuition, Education and Textbook Amounts Certificate. The certificate will show the number of months you were enrolled in a qualifying educational program or a specified educational program. The amount that can be claimed is $400 per month for full time enrollment, or $120 per month for part time enrollment.