Indigenous Peoples

Before you start

We recognize that many First Nations people in Canada prefer not to be referred to as Indians. However, 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.

Generally, a Status Indian is subject to the same tax rules as other Canadian residents unless their income is eligible for tax exemption under section 87 of the Indian Act. This section exempts from taxation the personal property of an Indian situated on a reserve.

If a status individual’s income is exempt from tax, they do not have to include that income on their income tax return. However, any other income must be declared.

For example, Old Age Security (OAS) pension payments do not qualify for the exemption under section 87 of the Indian Act. They are not related to any previous employment and are not considered to have any connection to a reserve. The payments are therefore considered to be off‑reserve. The fact that you live on a reserve is not significant enough to connect the income to a reserve. Therefore, normal rules apply to these payments.

Note

As a CVITP volunteer, you are not required to determine an individual's status, nor are you required to determine an individual's income exemption.

For more information related to these topics, go to Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) and Indigenous Services Canada (ISC).

To apply for Indian status and a status card, refer individuals to the Indian status web page. 

The COVID-19 pandemic has caused a significant shift in the workforce, and an individual may have been required to work from their home located on a reserve. As a result, their employment income could now be fully or partly exempt from tax under section 87 of the Indian Act.

Conversely, they may have been required to work off-reserve as a result of workplace restrictions.

To find out if employment income is exempt, refer individuals to Indian Act Exemption for Employment Income Guidelines and CRA and COVID-19 – Indigenous income tax issues.

For more information, see CRA and COVID-19.

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