Can anyone figure out the grey area on this? If an employee at a private school receives 50% tuition for their child, is that discount considered a taxable benefit even if the child attends at a younger than the traditional “schooling ages”.
For example, if the private school has a program that begins at 18 months, should it be a taxable benefit for the employee if they send their child to the school from 18 months until age 4? After which time, the school no longer treats it like a taxable benefit.
Taxable benefit is reported on a T4A to the child. At least that’s the treatment for universities.
I think Yes. A program for younger kids (i.e. Montessori) at a private school = child care and CRA is pretty clear on that as a taxable benefit. T4130(E) Rev. 22
Absolutely NOT a “grey area”. It’s a taxable benefit to the EMPLOYEE - there is no benefit to the child.
IF the program is a qualifying pre-school program, the employee should also be provided with a day care receipt. If it is a grade-school program there is nothing further needed.
A number of years ago, CRA reviewed the taxable benefit reporting at Saint Mary’s University in Halifax. They were reporting it as a taxable benefit to the employees. CRA decided it was the student who received the benefit of reduced tuition, regardless of who paid. T-slips were amended for a few prior years and life carried on. Both employees and students amended prior returns. Employees generally got refunds while students generally owed no tax. Overall, CRA came up the loser I this case. I can only assume there was a high-level politician somewhere who stood to benefit.
It may be that there is a different treatment between schools and post-secondary institutions.
For child care expenses, public schools in Nova Scotia issue receipts for child care for after-school programs such as Excel. Private schools do the same.
Interesting way to piss away 15 minutes.
Curious about the different treatment for Unis…probably because the students (eventually) will be taxable and it will eat up credits? Seems odd, or they aren’t “dependants”.
As an ex-private school treasurer who dealt with this annually, the treatment I outline is what CRA ruled on. That was some years back now, so they may have changed that, but I’ve not seen that in writing. I can check with the school involved though pretty easily.