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A new way to pay GRAs

Current and former graduate students who received payments as Graduate Research Assistants (GRAs) between 2008 and 2012 could be receiving a tax refund from the Canada Revenue Agency in the next few months.

Effective January 1, 2013, Queen’s has changed the way it pays GRAs, who are typically graduate students who take on research positions that support their studies and provide financial compensation.

Historically, the support GRAs received for their studies was taxed as income from employment and a T4 was issued at tax time.

The university’s decision to change its tax treatment of payments to GRAs was made to reflect the fact that GRA positions are essentially research fellowships, funded directly from research grants awarded to the faculty members who recruit and supervise graduate students.

The change in tax treatment, which is in accordance with the Canada Revenue Agency’s guidelines, makes most GRAs eligible for T4A income (fellowship income) instead of T4 income (employment income).

The change, which aligns Queen’s with practices at other universities, also benefits graduate students by reducing income tax payments and increasing take-home pay. It may make some students eligible for a retroactive tax refund for the 2008-2012 period.

The change does not apply to a GRA if the graduate student held or holds the GRA for financial gain and also was or is performing work not directly related to his or her studies. Such students continue to be classified as employees receiving T4 income. If a graduate student simultaneously holds a GRA directly supporting his/her studies as a trainee and is also a research assistant whose work is not related directly to his/her studies, the student will receive a T4A for income received as a research fellowship, as well as a T4 for the income received as an employee.

Where applicable, the Canada Revenue Agency has agreed to issue retroactive refunds automatically to affected students and alumni and there is no need for anyone to re-file a tax return.

Questions should be directed by email to GRAT4A@queensu.ca