Young and Frederick - ScotiaMcLeod Whitby

Financial & Estate Planning Group
Adam Salahudeen, LLB, Senior Manager, Taxation Advisory Services
Scott Cummings, National Director, Taxation

The Federal Budget was delivered on March 4, 2010 and contained a number of proposals impacting the taxation of individuals:

Medical Expense Tax Credit – Cosmetic Procedures

Budget 2010 proposes to make expenses incurred after March 4, 2010 for purely cosmetic surgical and non-surgical procedures that are aimed at enhancing ones’ appearance ineligible for the Medical Expense Tax Credit. Cosmetic procedures required for medical or reconstructive purposes will still be allowed.

Scholarship Exemption and Education Tax Credit

Budget 2010 proposes that for 2010 and subsequent years an amount will be eligible for the scholarship exemption only to the extent that it can reasonably be considered to be received in connection with enrolment in an eligible educational program for the duration of the period of study for which the scholarship was received.

If a scholarship, fellowship or bursary is received for a part-time program, the exemption will be limited to the amount of tuition and program materials costs paid unless the student is eligible for the Disability Tax Credit or is unable to be enrolled on a fulltime basis because of a physical or mental disability.

Budget 2010 also proposes to clarify that a post-secondary program that consists mainly of research will be eligible for the Education Tax Credit and the scholarship exemption only if it leads to a college or CEGEP diploma, or a bachelor, masters or doctoral degree. Post-doctoral fellowships will be taxable.

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