Never had anything like this. My clients are paid as a hospital employee, issued a T4 with all deductions taken. Employment expenses consist of all dues & practice insurance paid, plus any other applicable expenses.
But, your situation is exactly the same as those business COVID loans. Since they were provisionally forgiven based on one condition, the amount of the loan was recognized in income in the year the loan was made. If it was not repaid on time, a corresponding deduction was allowed for the year of default. I’d say your resident’s situation is exactly the same, and the hospital has correctly issued a T4A and put the assistance in box 48. In 4 years time when the loan is forgiven, there will be no tax consequences. So, you’d enter the T4A as usual and choose to report it on a T2125. The T2125 will be pre-populated with the amount from the T4A and you will enter his expenses - all dues and fees, including hospital fees allowing him to work at a particular hospital, liability insurance, professional fees, all the usual things. I had a doctor who needed hospital privileges at various hospitals in his geographical area, and each one took a chunk of cash. Sure adds up fast. It amazes me how people seem to consider doctors at the upper end of income. I’ve seen GP’s paying upwards of 30% of their gross in office overhead - salaries, rent, supplies. Then there’s hardware and training on the provincially mandated software they use to submit claims to actually get paid. They almost have to start out with a good nest egg.
A year ago, I was a guest at the local hospital and needed a PICC line so I could get twice-daily IV’s at the VON clinic. I chatted with the anesthesiologist while he was getting his equipment set up at the bedside and getting my line installed. I asked him how long to get his MD after an undergraduate degree. Then, how long to do the anesthesiology training, then how long of a course to install PICC lines. After we talked, I said, “So, it took you roughly 12 years before you saw your first nickel?” He thought for a bit and then agreed with me. I later found out that he was unsatisfied that they had no one on staff to install PICC lines and they had to send patients to another hospital to have one installed. So, he bought the equipment, took the course, and started doing them himself. Haven’t had to send a patient out to another shop since. During my time in hospital, I developed a lot of respect for all health care workers. Me and the cleaning lady were on a first name basis. Had to have an NG tube a few times. Once, a new resident asked the nurse if he could insert it with her supervision. He was quite proud of himself when he got it in correctly and at the correct depth. Lots of fun things to do in a hospital. Coming out alive is the best part.