The Tax Blog for Smart Canadians

Tips and tricks for Canadian tax filers at every stage of life from UFile's tax expert Gerry Vittoratos



Planting New Seeds for the Future

by UFile Team Équipe ImpôtExpert | Dec 18, 2018   Comments:

UFile blog planting new seeds

In many ways, ideas are just like seeds. As another year comes to a close, give yourself enough time to reflect on your goals and aspirations for the future. Canadians from coast to coast have untapped opportunities to enhance their skill set, realize a dream, or sow the seeds of their future. Grants and bursaries can further advance our country’s research ecosystem. Do you have a unique, inventive or enterprising idea but are not sure how to bring it to life? We have rounded up a couple of funding opportunities to help you grow your ideas into a reality.

National Research Council Canada - Industrial Research Assistance Program (IRAP)

The IRAP provides customized funding programs to help small and medium Canadian enterprises accelerate the growth of their businesses through innovation and technology.

Ontario Trillium Foundation (OTF) Seed Grant

The OTF provides seed funding to Ontarians to help support projects at the idea or conceptual stage. Get up to $75,000 if you apply by February 6, 2019.

Quebec Innovation Funding

Delivered by Canada Economic Development, this financial assistance program promotes innovation for businesses, non-profit organizations and business incubators.

British Columbia Northern Development Initiative Fund

This $50,000 grant was created to support small and medium-sized businesses in applied research, development and testing of innovative equipment or technologies.

Prince Edward Island’s Entrepreneur Loan Program

This program provides entrepreneurs age 18 or older with up to $100,000 for use as an investment in new and existing P.E.I. businesses.

Alberta Entrepreneurship Incubator Program

The program offers support for prospective entrepreneurs and recent graduates with innovative ideas creating new products or concepts in a traditional industry sector.

Tax Treatment of Grants and Bursaries

Now that you know where to go to finance your ideas, how are these sources of funding handled on your tax return?

Bursaries are non-taxable if you are in full-time studies in the current, previous, and following tax year. If you are considered a part-time student, then only $500, plus certain specific expenditures, are exempt from taxation. The excess amount is fully taxable.

Grants received are taxable. The way they are taxed depends on the reason for the assistance. If the grant is paid to reimburse expenses, then the deductible expenses must be reduced by the amount of the grant. If it is simply a general payment, then the amount has to be included in income and consequently taxed.

For bursaries, if you meet the full-time student rule (see above), no income is declared on the tax return. If you are considered a part-time student, then you must report the amount of the bursary minus $500 + allowable expenses.

For grants, if the purpose was to reimburse deductible expenses, then reduce the amount of the reimbursed expense by the grant amount. If the grant is a general payment, you must include it as income and it is usually considered business income.

Have more questions about claiming grants or bursaries? Connect with us on Facebook and Twitter for news and updates on the 2018 tax return and UFile online tax software. Visit Tax & U to get accurate answers to all your questions about your 2018 tax return.

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