Taxability of a Stipend

CRA was questioned whether a stipend paid to individuals as a ‘training allowance’ while participating in a government sponsored program to improve employability skills and provide work placement opportunities is taxable.

In this case the stipend was received under the Targeted Initiative for Older Workers which is intended to help older workers in vulnerable communities remain active and productive participants in the labour market.

The answer was Yes.

Amounts received in the year by a taxpayer as earnings supplements provided under a project sponsored by a government or government agency in Canada to encourage individuals to obtain or keep employment are included in income as government financial assistance. Generally, the purpose of an earnings supplement is to increase, for temporary periods, the income that an individual receives from a job in order to encourage them to accept a job. These payments should be reported on a T4A by the payer with appropriate income taxes withheld.

Apple iPad a medical device?

It was questioned whether an Apple iPad that is acquired to assist certain special needs children, including autistic children, to communicate more effectively would qualify for the medical expense tax credit.

Unfortunately the answer was no.

A payment in respect of a device or equipment may qualify as a medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner, must be included in the list of qualifying devices or equipment described in section 5700 of the Income Tax Regulations, and must meet certain conditions as to its use or the reason for its acquisition. For example, a Bliss symbol board or other similar device designed to be used to help an individual who has a speech impairment to communicate by selecting symbols or spelling out words qualifies.  However, CRA viewed that an Apple iPad for use by special needs patients to communicate more effectively would not qualify.

For help in determining whether a device qualifies as a medical device contact your local KH Office.