28 March 1994 Internal T.I. 9403587 - TRAINING ALLOWANCE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether a training allowance received by a status Indian is taxable

Position TAKEN:

N0

Reasons FOR POSITION TAKEN:

December 30, 1992 Memo from Taxation Programs Branch.

		March 28, 1994

	Vancouver District Office	Head Office
		Rulings Directorate
	Attention: S. Kerouate	B. Kerr
(613) 957-8953
									940358

Taxation of Indians

This is in response to your memorandum of February 4, 1994, wherein you requested our assistance concerning the taxability of a training allowance received by a status Indian.

We understand that a status Indian received a training allowance from Employment and Immigration Canada in order to attend a school located on a reserve. You have stated that the taxpayer worked on a reserve until 1991, lives on a reserve in XXXXXXXXXX and was training in school from XXXXXXXXXX

You asked whether the training allowance would be exempt from income tax.

Our Comments

As stated in the December 30, 1992 memorandum from the Taxation Programs Branch that was sent to all District Offices, Taxation Centres and the International Tax Office, training allowances received by a status Indian are tax exempt if:

-the Indian qualified for the training allowance through employment, the income from which was tax exempt; or

-the training allowance is paid by a government, and the Indian either lives on a reserve, or takes the training on a reserve.

In our view, the training allowance received by the status Indian in your situation would be exempt from income tax.

R. Albert
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch