Each year, our site gets flooded with visitors looking for information on taxation policy with respect to Canadian postdocs. Of course, much of this enthusiasm was sparked by the decision in Budget 2010 of the Canadian Government to stipulate specifically that the 2006 scholarship exemption would not be applicable to postdoctoral fellowships. Some of our readers are no doubt part of that affected cohort (2006-2009) and may find information they are looking for in our previous entries:
- 2012 Taxes for Postdocs: Dredging up the Past
- 2011 Taxes for Postdocs: At least we know the rules this year
- The CRA response to CAPS (guest blogger Carl Wonders)
- Let the Discussions Begin (guest blogger Marianne Stanford)
- 2010 Canadian Taxes: Did you get your T2202 and T4a?
- Budget 2010: Post Docs, be careful what you wish for…
The inconsistent status of postdoctoral fellows across the country has resulted in some very unfortunate personal situations for our highest tier of young academics, including back-dated claims from the Canada Revenue Agency of thousands of dollars, long legal battles and differences of several thousands of dollars of take home pay for postdoctoral fellows due to receiving a different tax form for the exact same national fellowship.
For those who started postdoctoral fellowships in 2010 and beyond, the rules are much clearer, though things are not particularly satisfying when the relative compensation of graduate students and postdocs is considered. There are swathes of graduate students on tax-exempt Canada Graduate Scholarships worth $35,000, many of whom will move on to postdoctoral positions that result in less take-home pay (~55% of postdocs reported earning $40,000 and under in a 2009 Canadian Association of Postdoctoral Scholars (CAPS) survey).
From a federal tax perspective, it is abundantly clear that postdoctoral fellow income is now fully taxable irrespective of the tax form you may have been issued. Note that (as I understand it) the Quebec provincial government still recognizes postdoctoral fellows (and their fellowships) as a component of training and the monies received are not taxed at the provincial level, but please do consult your local postdoctoral society for the best, most up-to-date information.
The argument put forth by the government in their response to the CAPS letters about the scholarship exemption and its applicability to postdoctoral fellows was that postdoctoral fellows – like training lawyers, accountants, and medical residents – are engaged in a temporary period of advanced training. This comparison reveals two issues that require major national lobbying efforts to address:
Unlike the comparator groups:
- The vast majority of postdoctoral fellows will NOT end up in the profession that they are purportedly training for.
- Postdoctoral fellows wages often are static, extended benefits are not always available, and there is often no access to EI or Canada Pension.
In the post-Budget 2010 world, these are the core issues that need to be addressed. Postdoctoral fellows need to figure out who they are and what they do and present it in a clear and coherent manner to policymakers. I would also encourage our readers to volunteer just a little of their time to help out with the efforts of their local postdoc association and with the national CAPS group.
I’m going to start a SSHRC postdoc in England in the Fall and I’m just trying to navigate the Tax rules. I see that you are at Cambridge and I wonder if you have any advice.
Did you pay your taxes in Canada or in England? How would you determine the province if you didn’t?
Much appreciated — it is a wonderful work you do here.