A welcome change for students was announced in the 2006 federal budget – eligible scholarship and bursary income will now be completely tax free. Previously, only the first $3,000 could be received without being taxable. Scholarships and bursaries will still be reported on T4A slips but it is not necessary to report this income on your personal income tax returns.

Also, a new textbook tax credit will be available for students who are enrolled in qualifying full time or part time post secondary courses. For full time students the credit will be $65 per month and for part time $20 per month. The credit will be treated in the same way as the existing education credit in that students who don’t need the credit will be able to transfer it to their spouses, parents or grandparents, or they will be able to carry it forward to future years

Please contact your accountant at Harvey, Lister & Webb Incorporated to discuss the possibilities.

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