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What to consider for Indigenous Peoples

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(Federal Maple leaf and Provincial Fleur-de-lys icons)Meaning of the term "Indian" according to the Indian Act 

For purposes of the tax exemption under section 87 of the Indian Act, the CRA and Revenu Québec use 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.

ITAVP tip

As an ITAVP volunteer, you are not required to determine an individual's status. If an individual is unsure of their status, refer them to Indigenous Services Canada.

 

Generally, a Status Indian is subject to the same tax rules as other Quebec residents unless their income is eligible for tax exemption under section 87 of the Indian Act. If a Status Indian's personal property, including income, is earned or situated on a reserve, it is tax exempt.

Tax tip

The Indian Act – Exempt income section in the federal tax return must be completed if there is exempt income.

 

Access UFile's instructions

(Federal Maple leaf icon)Form T90 – Income Exempt From Tax Under the Indian Act 

An individual who has income that is tax exempt under the Indian Act may 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 calculate the individual’s Canada training credit limit for the following year and Canada Workers Benefit amount for the current tax year, if the individual is eligible for these amounts.

UFile tip

The software will automatically report the tax-exempt income and the deductions related to that income on Form T90.

 

(Federal Maple leaf and Provincial Fleur-de-lys icons)Employment income and employment-related income 

Employment income may be partially or fully tax exempt, or non-exempt.

In general, employment-related income is treated the same way as the employment income that gave rise to it.

For example, if all of the individual’s employment income is tax exempt, then all of the employment-related income that the individual would be eligible for 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.

ITAVP tip

As a volunteer, you cannot determine an individual's tax-exempt employment income. If an individual would like to have more information, refer them to:

 

(Federal Maple leaf and Provincial Fleur-de-lys icons)Employment income - T4 slip and RL-1 slip 

Federal

  • Tax-exempt employment income is shown in box 71
  • The amounts shown on the slip must be entered into the software on the page corresponding to the slip:
    • this income is not reported on the tax return
  • The tax-exempt income is reported on Form T90

Provincial

  • The employment income giving entitlement to the deduction for income situated on a reserve (line 293) is shown in box R of the RL-1 slip
  • The amount shown in box R must be entered into the software on the page corresponding to the RL-1 slip
  • All employment income, including the income earned on a reserve by an Indian, must be reported in the Quebec income tax return and included in the net income calculation (line 275)
  • A deduction equivalent to the amount in box R of the RL-1 slip can be claimed on line 293 of the income tax return

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Workers' compensation benefits from the CNESST – T5007 slip and RL‑5 slip 

These benefits are an employment-related income.

Federal

  • The slip does not show the portion of the income that is tax exempt, the individual must confirm it:
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • this amount is not reported on the tax return
  • The amount shown on the T5007 slip must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • Since the portion of income giving entitlement to the deduction for income situated on a reserve (line 293) is not shown on the RL-5 slip, the individual has to confirm the amount:
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
  • the amount shown on the RL-5 slip must be entered into the software on the page corresponding to the slip
  • All benefits, including those giving entitlement to the deduction on line 293, must be reported on the Quebec income tax return and included in the net income calculation (line 275)
  • A deduction can be claimed on line 293 of the income tax return for the taxable amount

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Quebec Pension Plan benefits – T4A(P) slip and RL-2 slip 

In general, these benefits are treated the same way as the employment income that gave rise to them.

If a portion of the employment income was tax exempt, the same proportion of the benefit is tax exempt.

Federal

  • The slip does not show the portion of the income that is tax exempt, the individual must confirm it:
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • this amount is not reported on the tax return
  • The amount shown on the T4A(P) slip must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • The benefits giving entitlement to the deduction for income situated on a reserve (line 293) are shown in box A-1 of the RL-2 slip:
    • if the portion of the income that can be deducted on line 293 is not shown on the slip, the individual must confirm the amount
    • the confirmed amount must be entered into the software on the Status Indian exemptions page

o   the amount shown on the RL-2 slip must be entered into the software on the page corresponding to the slip

  • All benefits including those giving entitlement to the deduction on line 293 must be reported on the Quebec income tax return and included in net income calculation (line 275)
  • A deduction equivalent to the amount in box A-1 of the RL-2 slip can be claimed on line 293 of the income tax return

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Registered pension plan benefits – T4A slip and RL-2 slip 

In general, these benefits are treated the same way as the employment income that gave rise to it.

If a portion of the employment income was tax exempt, the same proportion of the benefit is tax exempt. 

Federal

  • The exempt benefits are shown in box 146:
    • if the slip does not show the portion of the income that is tax exempt, the individual must confirm it
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • this amount is not reported on the tax return
  • The amount shown on the T4A slip must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • The benefits giving entitlement to the deduction for income situated on a reserve (line 293) are shown in box A-1 of the RL-2 slip:
    • if the portion of the income that can be deducted on line 293 is not shown on the slip, the individual must confirm the amount
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • the amounts shown on the RL-2 slip must be entered into the software on the page corresponding to the slip
  • All benefits , including those giving entitlement to the deduction on line 293, must be reported on the Quebec income tax return and included in the net income calculation (line 275)
  • A deduction equivalent to the amount in box A-1 of the RL-2 slip can be claimed on line 293 of the income tax return

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)RRSP and RRIF income ‑ T4RSP, T4RIF slip, and RL-2 slip 

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

However, if the income comes  from a registered pension plan (RPP) that was transferred to an RRSP or a RRIF, the amount will be treated the same way as the RPP. This means, if the total amount or a portion of the RPP is tax exempt, the same amount or portion received from the RRSP or RRIF will be tax exempt.

Federal

  • The income from an RRSP is shown on a T4RSP slip and the income for a RRIF is shown on a T4RIF slip:
    • the slips do not show the portion of the income that is tax exempt, the individual must confirm them
    • the confirmed amounts must be entered into the software on the Status Indian exemptions page
    • these amounts are not reported on the tax return
  • The amounts shown on a T4RSP or a T4RIF slip must be entered into the software on the page corresponding to the slip
  • The exempt incomes are reported on Form T90

Provincial

  • The amounts from an RRSP or a RRIF giving entitlement to the deduction for income situated on a reserve (line 293) are shown in box A-1 of the RL-2 slip:
    • the amounts shown on the RL-2 slip must be entered into the software on the page corresponding to the slip
  • All amounts from an RRSP or a RRIF, including those giving entitlement to the deduction on line 293, must be reported on the Quebec income tax return and included in net income (line 275)
  • A deduction equivalent to the amount in box A-1 of the RL-2 slip can be claimed on line 293 of the income tax return

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Interest – T5 slip and RL-3 slip 

Interest income from a savings or chequing account is tax exempt if the following conditions are met:

Tax tip

If an individual’s interest income is less than $50, no slip or RL slip will be issued. This income must still be reported as either tax exempt or taxable.

If the interest income comes from an investment other than a savings or chequing account, call the confidential telephone line reserved for volunteers.

 

Federal

  • The slip does not show the portion of the income that is tax exempt, the individual must confirm it
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • this amount is not reported on the tax return
  • This amount shown on the T5 must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • Since the portion of the income giving entitlement to the deduction for income situated on a reserve (line 293) is not shown on an RL-3 slip, the individual must confirm the amount:
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • the amounts shown on the RL-3 slip must be entered into the software on the page corresponding to the slip
  • All interest income, including income giving entitlement to the deduction on line 293, must be reported on the Quebec income tax return and included in net income (line 275)
  • A deduction can be claimed on line 293 of the income tax return for the non-taxable amount
Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Dividends – T5 slip and RL-3 slip 

Dividend income is tax-exempt if the company’s head office, management and primary activities are located on a reserve.

Federal

  • The slip does not show the portion of the income that is tax exempt, the individual must confirm it:
    • the confirmed amounts must be entered into the software on the Status Indian exemptions page
    • these amounts are not reported on the tax return
  • The amounts shown on the T5 slip must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • Since the portion of the income giving entitlement to the deduction for income situated on a reserve (line 293) is not shown on the RL-3 slip,  the individual must confirm the amount:
    • the confirmed amount must be entered into the software on the Status Indian exemptions page
    • the amounts shown on the RL-3 slip must be entered into the software on the page corresponding to the slip
  • All dividend income, including income giving entitlement to the deduction on line 293, must be reported on the Quebec income tax return
  • A deduction can be claimed on line 293 of the income tax return for the non-taxable amount

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Social assistance payments – Letter from band council – T5007 slip and RL-5 slip 

Social assistance payments paid by a band council to their members who are status Indians and live on a reserve are tax exempt.

Federal

  • In general, the benefits are not taxable but they must be reported on the tax return
  • The benefits received from a band council are tax exempt and are shown in a letter or box 11 of the slip:
    • the exempt amounts from the letter or the slip must be entered into the software on the Status Indian exemptions page
    • these amounts are not reported on the tax return
  • The amount shown on the T5007 slip must be entered into the software on the page corresponding to the slip
  • The exempt income is reported on Form T90

Provincial

  • The benefits paid by a band council under the Act respecting the Cree Hunters Economic Security Board give entitlement to the deduction for income situated on a reserve (line 293) on the Quebec income tax return:
    • the benefits amounts are shown in a letter or in box A of the RL-5 slip
    • the amounts from the letter or the RL-5 slip must be entered into the software on the Status Indian exemptions page
    • the amounts shown on the letter or the RL-5 slip must be entered into the software on the page corresponding to the slip
  • The benefits received must be reported on the Quebec income tax return and included in net income (line 275)
  • A deduction can be claimed the on line 293 of the income tax return for the non-taxable amount

Tax tip

The band council may not issue any documents. These amounts must still be entered into the software.

 

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Old Age Security pension and the Guaranteed Income Supplement – T4A(OAS) slip 

The Old Age Security pension benefits and the Guaranteed Income Supplement are not tax exempt, even if the individual is a Status Indian living on a reserve. The amounts are reported on both the federal and the Quebec income tax returns. They do not give entitlement to the deduction for income situated on a reserve (line 293) on the Quebec income tax return.

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Impacts of tax-exempt income on deductions and tax credits 

Federal

  • 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 at the same percentage as the taxable income related to the deduction

Provincial

  • The net family income (total of the amount on line 275 of the individual's and the amount on their spouse's income tax returns, if applicable) is generally used to calculate tax credits and social benefits
  • The deduction is made in the calculation of taxable income so that the net income (line 275) reflects the income situated on a reserve

(Federal Maple leaf and Provincial Fleur-de-lys icons)Deduction for repayment of benefits related to COVID‑19 ‑ T4A Slip and RL‑1 slip 

In general a repayment of COVID-19 related benefit received in a previous year entitles the individual to a deduction on their federal tax return and on their Quebec income tax return. 

Federal

  • The repayment amount is shown in box 201 of the T4A slip:
    • the slip does not show whether the repayment is for a tax-exempt benefit
  • No deduction can be claimed for the tax-exempt portion of the repaid amount, as it was never included in a tax return

Provincial

  • The repayment amount is shown in box O-8 or O-9 of the RL-1 slip: 
    • the RL-1 slip does not specify whether the repayment was for a non-taxable benefit 
  • No deduction can be claimed for the non-taxable portion of the repaid amount because it was already deducted in the tax year in which the benefit was received  

Access UFile's instructions

(Federal Maple leaf and Provincial Fleur-de-lys icons)Northern residents deduction 

Individuals who meet the criteria and live in a prescribed zone may be able to claim the following deductions:

Federal

  • Only taxable income is included in the calculation of these deductions  

Provincial

  • Only taxable income is included in the calculation of these deductions  

Access UFile's instructions

(Provincial Fleur-de-lys icon)Deduction for workers 

The eligible employment income that gives entitlement to the deduction for income situated on a reserve (line 293) must be subtracted to reduce the amount of the deduction.

UFile tip

Once you’ve entered the eligible income, the software will automatically calculate the individual’s deduction.

 

(Provincial Fleur-de-lys icon)Quebec prescription drug insurance plan premium 

First Nations members registered as status Indians with Indigenous Services Canada (ISC), as well as Inuit recognized by ISC, receive coverage equivalent to the Quebec prescription drug insurance plan and are therefore exempt from paying the premium. However, be sure to enter the situation number in box 449 of the income tax return.

(Provincial Fleur-de-lys icon)Solidarity tax credit – RL-31 slip 

Owner of a residence in a territory where no municipal tax bill is issued

The governing authority of a territory where no municipal tax bill is issued must give an RL-31 slip to anyone who, on December 31 of the year in question, owned a residence in the territory so that they can claim the solidarity tax credit in their income tax return.

Individuals living in a recognized Indigenous territory who did not receive an RL-31 slip

If you live in a recognized Indigenous territory, you own, rent or sublet an eligible dwelling and you or your spouse did not receive an RL-31 slip, contact Revenu Québec for instructions on completing Schedule D of your income tax return and claiming the solidarity tax credit.

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2025-10-08