Tax Implications

This information is a general overview of the tax implications for receiving an ArtReach grant, either as an individual or as a group/ organization/ collective. While we aim to provide a resource that’s helpful for all, tax situations vary from person-to-person and organization-to-organization, so please speak with your accountant or the CRA about your own unique tax situation. ArtReach is NOT able to offset any tax costs in relation to the receipt of this funding.

 

Grants to Individuals

If the Applicant Name field on your grant application is that of an individual and you select the option of applying as an Individual Artist (as opposed to a group/ organization/ collective), you will be required to provide your SIN number, and The Toronto Arts Council will issue you a T4A form during tax season.

 

The Canadian Revenue Agency considers a grant to an individual as taxable personal income, and the T4A from the Toronto Arts Council must be filed with your personal income taxes.

 

You can deduct all program expenses (except for the funds you personally earned through the project) if proof is provided during tax filing. This means you will only pay taxes on the portion of the grant that you personally earned. This proof should be in the form of original receipts, invoices, etc.

 

Grants to Grassroots (Unincorporated) Groups/ Organizations/ Collectives

Grants to unincorporated groups/ organizations/ collectives should be claimed during tax season. It is the decision of the group how this will be handled in terms of which group member(s) will claim the grant. The income and expenses to be claimed can be split across multiple group members, or one member can claim all of the income and expenses. 

 

Grassroots groups/ organizations/ collectives will not be issued a T4A form by TAC. 

 

For All Grantees

All income that you personally earn through the delivery of your funded program must be claimed as personal income when filing your taxes.

 

For instance, if you are paid $2,000 from your $10,000 grant to coordinate and deliver your program, the $2,000 you earned must be claimed as income.

 

This Is Confusing- What’s the Gist?

1. Keep good financial records. It's important that you thoroughly track and file all program-related income and expenses. It’s good practice, and you’ll likely need this information come tax time

 

2. Claim your income earned. It’s your responsibility to claim any income you earn through an ArtReach grant as personal income during your tax filing

 

FAQS

 

Who needs to issue T4A forms?

In order to issue a T4A form, you must be registered with the CRA as a business and have a payroll number. Groups/ organizations/ collectives who are registered and have a payroll number should issue a T4A form to any individual earning over $499 in a calendar year. 

 

Are there any tax implications for accepting grant funds on behalf of my group/ organization/ collective?

No, there are no tax implications for accepting a grant payment on behalf of your group/ organization/ collective

 

I’m on ODSP, will my grant affect this?

On December 13, 2017, the Ministry of Community and Social Services announced that arts grants are exempt as both income and assets for people on the Ontario Disability Support Program and Ontario Works. 

 

Arts grants are, in general, not counted as income by ODSP. While you still have to report your grant to ODSP, all the money you receive, except for “living costs”, is “exempt as income and assets.” This means your grant money is yours to spend, according to the terms of your grant, and you won’t be disqualified from ODSP. 

 

Click here to read the full Ontario Disability Support Program (ODSP) & Arts Grants Brochure.

 

I need help- who should I ask about my tax questions?

We understand that taxes can be overwhelming and confusing! We recommend seeking support from a tax professional directly- either an accountant, or a representative of the CRA. You can also click here to see ArtReach's Resource Page on taxes for artists and non-profit organizations/ charities.