Memo: Self-Funded Research Grant Program Re-launch
To: Principals/Deans/Academic Directors and Chairs
CC: Divisional Academic HR contacts
From: Sioban Nelson, Vice-Provost, Faculty & Academic Life
Date: November 22, 2016
Re: Self-Funded Research Grant Program Re-launch
Effective November 15, 2016, the University will re-launch the Self-Funded Research Grant Program for faculty members and librarians with some changes.
The Self-Funded Research Grant Program permits, under certain conditions and through a mechanism that includes peer review, a faculty member or librarian to receive a grant in lieu of salary in order to pursue research. These grants are typically awarded for research being conducted during a research leave, but if the required conditions are met a grant could be awarded when a faculty member or librarian is not on research leave. The key provision of this program is that the faculty member or librarian must be undertaking a special research project that is not in the normal course of his/her research as an employee of the University.
A T4A slip will be issued for the research grant payment for tax purposes and will not, therefore, have income tax deducted by the University. The maximum grant amount cannot exceed 25% of the salary amount. It is the responsibility of the grant holder to claim eligible research expenses as a deduction against the T4A grant income when his or her annual tax return is filed.
For non-leave cases, the grant payment will not qualify for Canada Pension Plan and Employment Insurance coverage. Any resulting reduction in full-time equivalent (FTE) will impact pensionable service and employer health and dental plan subsidies, and may impact life insurance and long-term disability coverage amounts.
Please refer to the Self-Funded Research Grant Program Guidelines for more information.
Self-Funded Research Grants are awarded in relation to the Canada Revenue Agency (CRA)’s taxation year (January 1 to December 31). Applicants on approved research leave that spans two taxation years may request through one application a grant to cover eligible research expenses to be incurred in each taxation year during the leave period.
Application Process & Timelines
- The Grant Holder provides a full description of the research activity which is sufficiently detailed for a determination to be made as to the reasonableness of the proposed expenditures in the context of the research to be carried out;
- The application submitted to a single-department Faculty (SDF) Chair/Dean’s Office must clearly define the research project and demonstrate that the related research is separate and apart from the employee’s normal research work required under the terms of the employment. The primary purpose of the grant must enable the recipient to carry out a research project;
- The Grant Holder submits the application to the Chair/Dean (SDF) for research project review and approval;
- The Chair/Dean (SDF) will designate one of more U of T faculty member(s) or librarian(s) to conduct a peer review;
- For the re-introduction of the program, the application submission deadline is January 15, 2017; it will be May 1 and November 1 in 2017 and future years;
- Once the application is approved and signed by the Chair/Dean (SDF), the department then forwards the Self-Funded Research Program application form to Central Payroll Services, or the University of Toronto Mississauga (UTM) / University of Toronto Scarborough (UTSC) Payroll Office for processing by February 28, 2017;
- First grants are awarded and processed in year 2017; the re-launched program is not applicable to 2016 or prior years.
Grant Taxation Treatment
The approved grant is considered as T4A payment, and therefore no source deduction is withheld by the university. Deductibility of expenses for income tax purposes must be determined by the Grant Holder in accordance with CRA’s regulations and such deductions should be claimed when the awardee files his or her personal income tax return. Any questions with respect to the eligibility of expense deductions must be resolved between the grant holder and CRA. The Grant Holder alone is responsible for any additional income tax which may become payable as a result thereof.
Please refer to the CRA Income Tax Folio S1-F2-C3 for additional information; any questions about taxation regulations should be referred directly to CRA or to an external tax advisor.
Any questions about taxation issues arising from the grant should be referred directly to CRA or to an external tax advisor and not to the University.
For further information on the application and approval process, please contact your Chair/Dean’s Office.
Please contact Central Payroll Services for any payroll inquiries; or contact the Office of the Vice-Provost, Faculty and Academic Life regarding the criteria/eligibility for the program.