Make sure you maximize the benefits you are entitled to if you are First Nations, Inuit, or Métis
March 3, 2022
Canada Revenue Agency
If you are First Nations, Inuit, or Métis, you are subject to the same tax rules as any other resident in Canada unless your income is considered tax exempt under section 87 of the Indian Act. To continue getting your benefit and credit payments, you need to do your taxes, even if your income is tax exempt or you had no income at all. Here are a few tips to help you get the benefits and credits to which you are entitled.
COVID-19 benefits and your return
The COVID-19 benefits are generally taxable. Any amounts you received in 2021 must be reported on your 2021 Income Tax and Benefit Return, unless some or all of the amounts are exempt from tax under section 87 of the Indian Act.
If you received the Canada Recovery Benefit, Canada Recovery Sickness Benefit, or Canada Recovery Caregiving Benefit in 2021, 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 you are registered or entitled to be registered under the Indian Act and some or all of your income is exempt from tax under section 87 of the Indian Act, you will be able to get a refund for part or all of the tax that was withheld on payments you received in 2021 by filing your 2021 return.
You can choose to report the part of your income that is exempt from tax on Form T90, Income exempt under the Indian Act, so the Canada Revenue Agency (CRA) can determine your Canada Training Credit Limit, your Canada workers benefit, and calculate your family’s provincial or territorial benefits.
If you received COVID-19 benefits in 2021, you should have received a T4A information slip in the mail by the end of February. Residents of Quebec will receive a T4A information slip and an RL-1 slip.
T4A information slips from the Government of Canada for COVID-19-related benefits will also be provided online if you’re registered for My Account and have full access. To have full access to My Account, you need to enter the CRA security code we issued to you after completing the first step of the registration process.
Also, if you received any COVID-19 benefits in 2020 and didn’t file your taxes for 2020, it’s not too late! You can still file your taxes for 2020 and may be able to get a refund for part or all of the tax that was withheld on payments you received in 2020. If you received the Canada Emergency Response Benefit in 2020, you will have received a T4A slip (if you applied through the CRA) or T4E slip (if you applied through Service Canada).
The CRA may contact you to review your eligibility for a COVID-19 benefit(s). If the CRA is unable to confirm your eligibility, you will have to reimburse the amounts you received. While no interest and no penalty will be applied to your COVID-19 benefits debt, paying it off quickly will allow you to avoid impacts on your government benefits. COVID-19 benefits raise your total income in the year you received them, so your access to other government benefits may be affected. If you are unable to pay, payment arrangement parameters have been expanded to provide you with more flexibility on repayment. Visit the following links for information on Collection of individual COVID-19 benefits issued by the Canada Revenue Agency (CRA) or Collection of the Canada Emergency Response Benefit (CERB) issued by Service Canada to learn more.
If you are First Nations, Inuit or Métis (regardless of status, membership, or community residency), you may be able to use the Let Us Help You Get Your Benefits! credit and benefit short return form to file your taxes. If you are a First Nations individual who is registered or entitled to be registered under the Indian Act, and all of your income is exempt from tax, you may be able to file your taxes using the T1S-D Credit and Benefit Return form. Both forms can be used to get a refund of the 10% tax withheld at source. These two forms are only available on paper through band council offices, friendship centres, CRA officers or community representatives, and cannot be downloaded. Please contact the resource most accessible to you or visit the Taxes and benefits for Indigenous peoples page to see if you meet the eligibility criteria to use these forms.
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 of the Indian Act. 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 in a prescribed zone for a period of at least six consecutive months, you may be able to claim the northern residents deductions. 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, the GST/HST credit, and the Canada workers benefit. Find out if you are eligible by reading our guide, Benefits and credits: Information for Indigenous peoples.
By filing your taxes by the deadline each year it ensures that you will receive any benefits or credits and any related provincial & territorial credits that you may be entitled to. This is because the CRA uses the information from your tax return to determine if you are entitled to these benefits and credits.
Get free tax help
You may qualify to get free tax help if you have a modest income or simple tax situation. 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 or friendship centre for information on free tax clinics being offered in your community. This year, volunteers may be able to complete and file returns virtually by videoconference or phone, or through a document drop-off arrangement.
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 make a payment
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, our expanded payment arrangements could work for you.
For more information on how to pay the CRA, visit canada.ca/payments.
Protecting you from scams and fraud
The safety and security of Canadians and their information is a priority for the CRA. Being a victim of a scam, fraud, or identity theft can result in significant financial and emotional effects.
Know when and how we might contact you. The Be Scam Smart page provides information on the ways in which we may contact you, including by:
- text message
For more tips and information on protecting and securing your CRA account, visit our Slam the scam and Security of your CRA account pages.
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