March 9, 2026

Are scholarships taxed in Canada?

Paying for education can be expensive, but there must be no compromise with education. That’s why scholarships, grants, and bursaries prove to be a major relief for students. However, a lot of students and even parents in Canada wonder: Are scholarships taxed in Canada? Today, we’ll find out all that you need to know about scholarships in Canada through this informative blog.

It basically depends on the type of scholarship, who receives it, and whether the student qualifies for the education amount under the Canada Revenue Agency (CRA) rules.

What Is A Scholarship As Per The CRA?

The CRA has a particular definition for a scholarship. It is financial assistance that’s awarded to students to help them pay for their education-related expenses. This can include –

  • Scholarships
  • Bursaries
  • Grants
  • Fellowships
  • Prizes related to academic achievement

These are collectively referred to as scholarship income for tax purposes.

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Are Scholarships Taxable In Canada?

Most scholarships are not taxable in Canada, provided the student qualifies for the scholarship exemption.

So, what is a scholarship exemption? The CRA provides a full scholarship exemption for students who are enrolled in an eligible educational program. If you qualify, the entire amount of your scholarship income becomes tax-free.

Who Qualifies For The Scholarship Exemption?

Two conditions need to be met if you want to receive the full exemption –

  • To be enrolled in an eligible educational program
  • Eligible to claim the tuition tax credit

The eligible educational programs include –

  • Full-time post-secondary programs
  • Part-time programs that are at least 3 consecutive weeks, and require 10+ hours per week of coursework
  • Various programs at recognized colleges, universities, or other eligible institutions

If the student meets these criteria, the scholarship, bursary, or grant generally is 100% tax-free.

To know more about the eligibility factors and if you are eligible or not, get in touch with Taxccount Canada tax specialists, and the team will assist you.

Scholarships For Full-Time Post-Secondary Students

For most full-time college or university students, scholarships are not taxable.

For example –

  • Entrance scholarships
  • Merit-based scholarships
  • Government education grants
  • Need-based bursaries

As long as the student qualifies for the tuition credit, the complete amount is exempt from tax, even if the scholarships exceed the tuition fees.

Scholarships For Part-Time Students

If you thought that scholarships are only for full-time students, then that’s wrong. Even part-time students can receive tax-free scholarships, but there are certain limitations.

  • The full exemption applies if the program qualifies as an eligible educational program
  • If it qualifies as a specified educational program, the exemption may be limited

In cases where the full exemption doesn’t apply, the taxable portion is reduced by –

  • Tuition fees paid, plus
  • $500 (basic scholarship exemption)

Are High School Scholarships Taxed In Canada?

Yes, high school scholarships may be taxable in Canada. If the student has not enrolled in a post-secondary eligible program, then the scholarship exemption doesn’t apply fully.

In such cases –

  • The high school scholarship is considered taxable income
  • The first $500 may be exempted
  • The remaining amount must be reported as income on your tax form

Are Scholarships For Research And Fellowships Taxed?

Research-based funding is usually treated differently in Canada.

Fellowship Income

  • It is often fully taxable
  • Is considered income earned for research or academic work
  • Most common at the graduate or postdoctoral level

Research Grants

  • It may be taxable based on how the funds are being used
  • If the CRA allows, certain expenses can be deducted

Graduate students need to be particularly careful because not all academic funding is tax-free, even it feels similar to a scholarship. That’s why it is recommended that you seek professional guidance from an expert, like Taxccount Canada.

How Are Scholarships Reported On The Tax Return?

Even if the scholarship is fully exempted, it still needs to be reported on your tax return, and it won’t increase the tax payable.

Where does it appear –

  • T4 slip, usually in Box 105 (Scholarship, bursary, fellowship income)
  • Reported on Line 13010 of your personal income tax return

If the scholarship is exempted, it is usually deducted later using the scholarship exemption, which results in no tax owed.

What Happens If You Don’t Report Your Scholarship Income?

A lot of students think that since scholarships are tax-free, there is no need to report them on the tax return. Even if your scholarship is tax-free, not reporting it may cause CRA issues, including –

  • Matching errors with T4 slips
  • CRA review and reassessment
  • Delay in refunds

Make sure to always report the scholarships correctly and apply the exemption wherever it is applicable.

Are International Students’ Scholarships Taxed?

You may not know that international students studying in Canada may also qualify for a scholarship exemption if –

  • They are enrolled in any eligible educational program
  • The scholarship is related to education

However, tax treaty rules and the student’s residency status may affect the taxation process. International students should take professional help to ensure correct reporting, and who better than Taxccount Canada? The team can help with –

  • Determining if the scholarship is taxable or not
  • Accurate reporting of T4A income
  • Avoiding CRA reassessment
  • Applying for scholarship exemptions correctly
  • Maximizing the available education-related credits

Common Situations Where Scholarships Are Taxable

Scholarships in Canada may be partially or fully taxable if –

  • The student is not enrolled in an eligible educational program
  • The funding is considered employment or research income
  • The student is not eligible for tuition tax credits
  • The scholarship is received before or after studies

Get professional help to avoid any ambiguity and correct tax filing.

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This is general information only and not professional advice. Consult a professional before acting.