Students: What is "income" for tax purposes, and what isn't?
Knowing what the tax department counts as “income” which has to be reported on your tax return is important, to make sure your return is accurate and complete. As a student it can be confusing with having part-time jobs, getting student loans, and possibly receiving money from your parents.
While you are a student, your income on your tax return is most often going to consist of employment income from your jobs, and scholarships, awards or bursaries you may receive for school.
Your employers should provide you with a T4 slip that shows the amount you were paid, and the corresponding deductions they took for Canada Pension Plan (CPP), Employment Insurance (EI) and income tax. If you worked for someone and they didn’t deduct these amounts and give you a T4 slip, you may have to report what you earned as business income, since it would appear that they didn’t actually set you up properly as an employee and instead paid you as a contractor.
The source of any scholarships or bursaries (often your school, but sometimes other agencies) should provide you with a T4(A) slip which shows the amounts you received. While these amounts are often not taxable (depends in part if you are a full-time student or not), they must usually still be reported on your tax return. Research grants are different, however, as they are treated as a type of employment income.
If you receive funds from an RESP (Registered Education Savings Plan), you will also receive a T4A slip which shows any taxable amounts you have to include on your return.
T4 and T4A slips are due to be prepared and sent to you by the end of February. If you think you should have received a slip and didn't, you can check with Canada Revenue Agency (CRA), or authorize your tax preparer to access your account to check for you.
Money that you receive as a gift or loan from your parents for school, or expenses that they pay on your behalf, are NOT included in your income on your tax return. Proceeds from student loans that you receive are also NOT part of your income for tax purposes, and so don't get added into your income there.
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