Do Scholarships or Bursaries Count as Taxable Income in Canada?

If you’ve received a scholarship, grant, or bursary in Ontario (or anywhere in Canada), you might wonder if it’s considered taxable income. The good news? Most students don’t pay tax on these awards — but there are exceptions.

When Scholarships and Bursaries are Tax-Free ✅

Your scholarship or bursary is fully exempt from tax if:

• You’re enrolled full-time in a qualifying educational program at a recognized post-secondary institution in Canada or abroad.

• The award is meant to support your education-related costs (tuition, books, living expenses).

Under the scholarship exemption, the entire amount can be excluded from your taxable income if it meets the CRA criteria.

When They Become Taxable ⚠️

Some awards are partially or fully taxable if:

• You’re in a non-qualifying program (e.g., certain part-time courses, online casual learning).

• The payment isn’t connected to your education (e.g., a general prize or award).

• You’ve left school but still received the funds.

In these cases, only the portion that exceeds the CRA exemption limit will be taxable.

The T4A Slip Confusion 📄

Even if your award is tax-free, you might still get a T4A slip from your school or funding provider. Don’t panic — a T4A doesn’t automatically mean you owe tax. Instead:

1. Report it on your return.

2. Claim the scholarship exemption if eligible.

   
   

Ontario Student Considerations

• The rules are federal, so they apply across Canada, including Ontario.

• Ontario-specific student grants (e.g., OSAP bursaries) also follow these same CRA rules.

• If you receive both provincial and federal funding, assess them together for tax purposes.

  
  

💡 Tip for Students: Keep all award letters and proof of enrollment. It makes claiming your exemption much smoother if the CRA asks questions.