Tax Implications for Bursary Benefits

Important Information for Employees Who Have Used the Bursary Program for Dependents or Who Anticipate Using the Bursary Program for Dependents

The tuition bursary program provides the dependents of eligible employees with a financial benefit to be applied towards their tuition fees. Since 2006, McMaster's Tuition Bursary policy has recognized this as a taxable benefit to the employee, as per the direction of the Canada Revenue Agency (CRA), and income tax and CPP has been deducted from the benefit accordingly.

In 2009, the CRA has changed their guidelines, clarifying that the tuition bursary is not a taxable benefit to employees, and should be treated as income to the family member receiving the benefit. The Tuition Bursary benefit will not be included in the employee's reported income or on the employee's T4 slip. The benefit will be included on a T4A slip issued to the student.

 Implications for Employees Accessing the Tuition Bursary benefit at a Future Date

The Tuition Bursary benefit will not be included in the employee's reported income or on the employee's T4 slip. The benefit will be included on a T4A slip issued to the student.

 QUESTIONS?

If you have questions about the tax application of the Tuition Bursary benefit, please contact Human Resources Services at extension 22247.