Financial Assistance

Source deductions of income tax

Financial assistance paid under one of the following programs is subject to source deductions of income tax:

  • a program established by the Canada Employment Insurance Commission under Part II of the Employment Insurance Act;
  • a program (other than a prescribed program) that is:
    • similar to a program established under Part II of the Employment Insurance Act,
    • established by a government or government agency in Canada or by another organization, and
    • the subject of an agreement between a government or government agency in Canada or another organization, as applicable, and the Canada Employment Insurance Commission.

However, the portion of financial assistance paid for childcare expenses or tuition fees is not subject to source deductions or employer contributions.

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