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signing bonus / tuition [#permalink]
15 Aug 2012, 08:23
So I'm about to get a signing bonus for my post-graduation job, and I'm going to spend most of it on tuition. That said, if the company paid the bonus directly to the school and called it a scholarship, would that be tax free?
Probably to late for you, but if someone else looks at this thread:
From a Canadian tax law perspective: If you get the bonus as a scholarship then it reduces your tax deductions for tuition paid. Considering it is August of the year now, your income for 2012 is probably low and tax rate also probably low. Thus it is better to keep your tuition tax credits (that carry over) by not taking the bonus as a scholarship.
Tuition tax credits are worth more than the tax you'd pay on the bonus since this year your income was low due to being in school.