Tax information for Indigenous peoples
February 11, 2021
Canada Revenue Agency
The Canada Revenue Agency (CRA) understands that this will be a tax season like no other. The COVID-19 pandemic may have affected the way you complete your taxes, and in some cases, it may mean you will be filing an income tax and benefit return (return) for the first time this year. We want you to be aware of the tax benefits and requirements that apply to you during this tax filing season. Here’s what you need to know.
COVID-19 benefits and your return
The Canada emergency response benefit (CERB), Canada emergency student benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), or Canada Recovery Caregiving Benefit (CRCB) are generally taxable. Any amounts you received in 2020 must be reported on your 2020 return, unless some or all of the amounts are exempt from tax under section 87 of the Indian Act. In this case, you can choose to report the part that is exempt on Form T90, Income exempt under the Indian Act, so the CRA can determine your Canada Training Credit Limit (CTCL), your Canada workers benefit (CWB), and calculate your family’s provincial or territorial benefits.
Note that the CESB is not exempt from tax and must be reported on the 2020 return. Those who received CESB are not to report it on Form T90.
Recipients will receive a T4A slip (if they applied through the CRA) or T4E slip (if they applied through Service Canada). Slips will arrive in the mail or electronically. Residents of Quebec will receive both a T4A and RL-1 slip.
If you received the CERB or CESB, no tax was withheld when payments were issued. If you received the CRB, CRSB, or CRCB, 10% tax was withheld at source. Since these benefits are taxable, you may owe no tax, owe tax, or be entitled to a refund when filing your return. This will depend on personal circumstances, the type of COVID-19 benefits received, and other sources of income, deductions and credits.
If some or all of your income is exempt from tax under section 87 of the Indian Act and you are registered, or entitled to be registered under that Act, you may be able to get a refund for part or all of the amount that was withheld on payments you received in 2020 by filing your 2020 return.
If you are a First Nation member, you may be able to use the T1S-D Credit and Benefit Return or the Let Us Help You Get Your Benefits! credit and benefit short return to file your taxes. Please contact your band office to see if this option is available to you.
Working from home: Income tax exemption
The COVID-19 pandemic has caused a significant shift in the workforce, and you may have been required to work from your home located on a reserve. As a result, your employment income could now be fully or partly exempt from tax under section 87. To find out if your income is exempt, visit Indian Act Exemption for Employment Income Guidelines. Conversely, you may have been required to work off reserve as a result of workplace restrictions. To find out if your income is still exempt despite changes in your situation, visit CRA and COVID-19 – Indigenous income tax issues.
If your income is exempt, you are required to inform your employer as they will need to complete a TD1-IN Determination of Exemption of an Indian's Employment Income form and issue your T4 slip accordingly. If you have further questions about your situation, visit Tax exemption under section 87 of the Indian Act.
You may also be eligible to claim home office expenses if you are working from home.
If you live or own a business in a prescribed northern zone, you may be able to receive benefits and credits by doing your taxes. This year, it is important to file your return as soon as you receive all your tax slips and have all your tax information ready, and before the filing deadline. The effects of the COVID-19 pandemic may delay your ability to file a return, slow down your assessment or impact when you receive refund, credit or benefit payments. Visit our page on Northern residents for the most up-to-date information on deductions for residents.
Help for you and your family
There are several benefits and credits available to help you and your family, such as the Canada child benefit, GST/HST credit, and the Canada workers benefit. Find out if you are eligible by reading our guide, Taxes and benefits for Indigenous peoples.
It is important that you complete your taxes on time every year, even if you do not owe any taxes, if your income is tax exempt, or if you had no income at all. This is because the CRA uses the information from your tax return to determine your eligibility for benefits and credits, and any related provincial and territorial payments.
Get free tax help
If you have a modest income and a simple tax situation, a volunteer may be able to complete your income tax and benefit return, for free. This year, volunteers may be able to complete and file returns virtually by videoconference or phone, or through a document drop-off arrangement. To determine if you’re eligible and to find a tax clinic, go to canada.ca/taxes-help. You can also contact your band office for information on free tax clinics being offered in your community.
You can also quickly and securely file your return online. The CRA has a list of certified tax software products that are easy to use, fast, and secure. Some of which are free.
Many ways to pay your taxes
The CRA understands that individuals might be dealing with difficulties in meeting their financial obligations, including paying tax debts they may have incurred prior to or during the COVID-19 pandemic. If you cannot pay an existing debt in full, you may be eligible for a payment arrangement. Payment arrangement options are being expanded to reflect current realities resulting from COVID-19 and give Canadians more time and flexibility to repay based on their ability to pay.
For more information on how to pay the CRA, visit canada.ca/payments.
Protecting you from scams and fraud
We recognize that there is a significant financial and emotional effect on victims of scams, fraud, and identity theft and we are doing our best to protect Canadians and ensure they receive the benefits to which they are entitled.
It is important to protect yourself from scams, and to know when and how the CRA might contact you.
As a fraud prevention measure you can sign up for email notifications from the CRA to receive a notification when you have new mail to view in My Account and when important personal information such as your address or direct deposit information is changed on CRA records. You can register to receive email notifications in My Account or the MyCRA or MyBenefits CRA web apps.
The scams and fraud webpage provides more information about how to protect yourself from fraud.
For individuals and businesses
General enquiries: 1-800-959-8281
General enquiries for residents of the territories: 1-866-426-1527
Business enquiries: 1-800-959-5525
Your may also visit the Contact the Canada Revenue Agency webpage for more information.
Canada Revenue Agency
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