What to consider for Indigenous Peoples

On this page

• Status Indian definition
• Form T90 Income Exempt from Tax under the Indian Act
• Employment income and employment-related income
  • Employment income (T4)
  • Employment insurance benefits (T4E)
  • Workers' compensation benefits (T5007)
  • CPP or QPP benefits (T4A(P))
  • Registered pension plan benefits (T4A)
• RRSP and RRIF income (T4RSP and T4RIF)
• Interest income (T5)
• Old age security pension and guaranteed income supplement (T4A(OAS))
• Social assistance payments (T5007 or letter from band council)
• Scholarships, fellowships, bursaries and study grants (T4A box 105)
• United States Social Security benefits
• COVID-19 benefits repayment (T4A and T4E)
• Northern residents deductions
• The effects of tax-exempt income on deductions and tax credits
• Residency information for tax administration agreements

Status Indian definition

For purposes of the tax exemption under section 87 of the Indian Act, the CRA uses the term "Indian" because it has a legal meaning in the Indian Act. Individuals who are "Indians", as defined in the Indian Act, are often referred to as Status Indians.

Form T90 Income Exempt from Tax under the Indian Act

Individuals who are registered, or eligible to be registered, as a Status Indian under the Indian Act and have income that is tax exempt under the Indian Act can use Form T90 to report all their tax-exempt income and the deductions related to that income.

The form T90, will allow the CRA to properly calculate the individual’s Canada training credit limit (CTCL) for the following year, if applicable, and the Canada workers benefit (CWB) for the current tax year.

Employment income and employment-related income

Employment income can be tax exempt, partially tax exempt, or non-exempt. This may include employment income earned by a Status Indian who does not live on a reserve, but who performs their duties of employment on a reserve.

Generally, if a Status Indian receives employment-related income, it is tax exempt in the same proportion as the employment income that it is related to.

For example, if all of the individual’s employment income is tax exempt, then all of their eligible employment-related income would also be tax exempt. However, if only 50% of their employment income is tax exempt, then only 50% of their employment-related income would be tax exempt.

Employment income (T4)

• Employment income that is tax exempt is found in box 71 of a T4 slip
• Enter the amounts from the T4 slip into the UFile software on the corresponding slip page:
  • this income is not reported on the tax return
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

Employment insurance benefits (T4E)

• These benefits are employment-related income
• The benefits are tax exempt in the same proportion as the employment income that it is related to
• The tax-exempt benefits are found in box 18 of the T4E slip and included in box 14:
  • the amount in box 18 is not reported on the tax return
• The amounts on the T4E slip must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

Workers' compensation benefits (T5007)

• These benefits are an employment-related income
• The benefits are tax exempt in the same proportion as the employment income that it is related to
• The slip does not show the tax-exempt portion:
  • the individual must confirm the tax-exempt amount
  • the tax-exempt amount must be entered into the software on the Status Indian exemptions page
  • this amount is not reported on the tax return
• The amounts on the T5 slip must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

CPP or QPP benefits (T4A(P))

• These benefits are an employment-related income
• The benefits are tax exempt in the same proportion as the employment income that it is related to
• The slip does not show the tax-exempt portion:
  • the individual must confirm the tax-exempt amount
  • the tax-exempt amount must be entered into the software on the Status Indian exemptions page
  • this amount is not reported on the tax return
• The amounts on the T4A(P) slip must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

Registered pension plan benefits (T4A)

• The tax-exempt benefits are found in box 146 of the slip
• The slip does not show the tax-exempt portion:
  • the individual must confirm the tax-exempt amount
  • the tax-exempt amount must be entered into the software on the Status Indian exemptions page
  • this amount is not reported on the tax return
• The amounts on the T4A must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

RRSP and RRIF income (T4RSP and T4RIF)

Generally, amounts received from a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF) are taxable.

However, if the income received is from a registered pension plan (RPP) that was transferred to an RRSP or a RRIF, the income from the RRSP or RRIF will be tax exempt in the same proportion as the RPP.

• The income from an RRSP is found on a T4RSP slip and the income for a RRIF is found on a T4RIF slip:
  • the slips do not show the tax-exempt portion
  • the individual must confirm the tax-exempt amounts
  • the tax-exempt amounts must be entered into the software on the Status Indian exemptions page
  • these amounts are not reported on the tax return
• The amounts on a T4RSP or a T4RIF slip may need to be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

UFile instructions

Interest income (T5)

• Interest income from a savings or chequing account is tax exempt if it meets the following conditions :
  • the branch of the financial institution where the account was opened is located on a reserve
  • the interest is paid by a financial institution located on a reserve
• The slip does not show the tax-exempt portion:
  • the individual must confirm the tax-exempt amount
  • the tax-exempt amount must be entered into the software on the Status Indian exemptions page
  • this amount is not reported on the tax return
• The amounts on the T5 must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Old age security pension and the Guaranteed income supplement (T4A(OAS))

• The old age security (OAS) pension benefits and the guaranteed income supplement are not tax exempt, even if the individual is a Status Indian living on a reserve
  • these payments must be reported on the tax return
• The amounts on the T4A(OAS) slip must be entered into UFile software on the corresponding slip page 

Related topics

• UFile instructions

Social assistance payment (T5007 or letter from band council)

• Social assistance payments paid by a band council to their status members living on reserve are tax exempt
  • benefits paid by a municipal, provincial or territorial government must be reported on the tax return
• The benefits received from a band council are found in a letter or box 11 of the T5007
  • the tax-exempt amounts from the letter or the slip must be entered into the software on the Status Indian exemptions page
  • tax-exempt amounts are not reported on the tax return
• The amounts on the T5007 must be entered into UFile software on the corresponding slip page
• The tax-exempt income is reported on Form T90

Related topics

• UFile instructions

Scholarships, fellowships, bursaries and study grants (T4A box 105)

• A student’s income from scholarships, bursaries and similar payments are usually not taxable if the following applies:
  • they were a full-time or part-time student in a post-secondary program
  • they qualify for the scholarship exemption
• If the scholarship exemption does not apply, the income may still be tax exempt if either of the following applies:
  • it is received from Indigenous Services Canada, either directly or through the individual's Band council
  • it is paid on behalf of the Crown in order to meet a treaty obligation

Related topics

• UFile instructions

United States Social Security benefits

• U.S. Social Security benefits are not tax exempt, even if the individual lives on a reserve
• These payments must be reported on the tax return

Related topics

• UFile instructions

COVID-19 benefits repayment (T4A and T4E)

• No deduction can be claimed for the tax-exempt portion of the repaid amount since the tax-exempt amount was never included in a tax return
• Repayment amounts are found in box 201 on the T4A slip or box 30 on the T4E slip
  • the slips do not indicate if the repayment is for a tax-exempt benefit

Related topics

• UFile instructions T4A
• UFile instructions T4E

Northern residents deductions

• Individuals who meet the eligibility requirements, live in a prescribed zone in Canada and who have income that is not tax exempt, may be eligible to claim the northern residents deductions

Related topics

• UFile instructions
• Northern residents deductions

The effects of tax-exempt income on deductions and tax credits

• Tax-exempt income under the Indian Act could be used to calculate deductions, benefits and tax credits
• The amount of certain deductions will be granted in the same proportion as the taxable income it is related to

Residency information for tax administration agreements

• For individuals living in Newfoundland and Labrador, Yukon, or the Northwest Territories, complete the Residency information for tax administration agreements section of the tax return
  • for residents of British Columbia, this section needs to be completed for the 2023 and prior tax years