CC: Before getting started, The CRA would like to acknowledge the prosperous land across the nation that sustains us and enriches our lives. We recognize and extend our gratitude to the Indigenous peoples who have cared for these lands and who continue to guide us in building respectful relationships rooted in the spirit of reconciliation.

We invite you to take a moment to reflect on your own connection to the land from which you are joining us today, and to honour the Indigenous caretakers who have shaped, and continue to shape, its ongoing story.

Welcome to Taxology, the official podcast of the Canada Revenue Agency. I’m your host CC, and on part 1 of this series, we’ll be helping Indigenous people navigate Canada’s tax system, and access the benefit and credit payments they’re entitled to.

Like any other taxpayer, Indigenous people can benefit from filing an income tax and benefit return every year, even if their income is tax-exempt or if they have modest or no income. Our guest from the CRA is Nancy. She focuses on outreach and support to Indigenous people. She has so much helpful information, that we had to split it up into two parts!

On this episode, we’ll go through some the basics that you’ll need to know about taxes and benefits as an Indigenous person. We answer common questions and misconceptions, and highlight the importance of updating your personal info with the CRA year-round, so you have what you need to file a return and get what you’re entitled to.

So, let’s get to the helpful information, and welcome Nancy to the show.

Welcome to the show, Nancy. Tell us a little bit about yourself.

Nancy: Great, thank you. My name is Nancy.

I've been with CRA for the last 26 years and I've been responsible for teams in tax and benefits. So the contact centre in my current position where I am managing the Community Volunteer Income Tax Program, Outreach and Indigenous services, so the Indigenous side of that service.

And for me, I've had the opportunity to establish relationships with Indigenous organizations and their volunteers, and I really value the community's feedback.

CC: That's great. Well, let's get started into talking about taxes specifically for Indigenous Peoples. One common misconception or stereotype about taxes and Indigenous peoples in Canada is that Indigenous peoples don't pay taxes at all. Is that true?

Nancy: No, this is not true. Only some registered First Nations individuals may be able to claim tax exempt income.

So it's important to know that the term “Status Indian”, it's a legal term, and it's used when referring to registered or those who are entitled to be registered under the Indian Act. However, having Indian status does not mean that all of your income is automatically tax exempt. It's not the person that's exempt, it's the income.

So it's also important to clarify what is tax exempt income? What does it mean? It's income that's not taxed. And tax exempt income always depends on your situation, and you must still file an income tax return to receive benefits and credits.

So tax exempt applies only when there are very specific conditions that are met, which are found in the Section 87 of the Indian Act. So several factors or things to consider to determine whether income may be tax exempt include, you know, whether you are registered or eligible to be registered under the Indian Act, which I just talked about.

Where you live, is it on or off reserve? Where you work, is that on or off reserve? Or where your employer is located. If you work on a reserve, but the employer is based off reserve, you may need to complete additional forms for your income to qualify for the exemption.

So it's the kind of income and where it comes from that determines if it qualifies for the exemption. If you're unsure, you know, whether your income qualifies for an exemption, you can contact the CRA directly for assistance with that. And when it comes to questions about Indian status, as again, the legal term for the Indian Act, you would contact Indigenous Services Canada for that.

CC: Okay. So then to clarify, Indigenous Peoples need to file their taxes, but not necessarily all of their income needs to be taxed.

Nancy: Yes. It's important to file their tax return because that is the gateway to getting benefits and credits and to make sure year over year that they continue to file because that will continue their benefits.

CC: Right! Of course!

Nancy: Okay, let’s do a quick review of the key benefits you might be eligible for as a result of filing:

The first one that I’ll be talking about is the Canada Child Benefit. So what is the Canada Child Benefit? It’s a monthly payment made to eligible families to help cover the cost of raising children under the age of 18.

This payment can also be made to a grandparent or another relative who is primarily responsible for the child’s day-to-day care. In other words, the person who takes care of the child is the one eligible to receive this benefit. Additionally, for this particular credit, you'll also need to apply for it. You need to file your tax return to qualify for this. So that's important to know.

So next, there is the GST/HST credit. This is a non-taxable payment provided to individuals and their families with low income. It’s important to note that this credit has been enhanced and is now called the Canada Grocery and Essentials Benefit. You don’t need to do anything further to receive this benefit other than file your tax return, as eligibility is determined through this process.

A third benefit that can be made available to you is the Canada Workers Benefit. This is a refundable tax credit that provides financial support to individuals and their families who are working, but earning a modest income. So, refundable tax credits are credits that can be paid to you if you are eligible and can result in a refund. Or they are paid in a series of payments through the year to assist with living expenses.

CC: Does Canada Child Benefit, GST/HST Credit, and things like Canada Workers Benefit, does that count as income? Do I have to put those on my income tax return?

Nancy: No, that's a good question. These payments are non-taxable, so you do not have to include them as income when you file your return.

CC: So, people who get social assistance or income assistance or like retirement, does that count as income? Do they also need to file?

Nancy: Absolutely. It's important for anyone that receives any kind of slips. And, you know, the T5007 is normally the slip that you would get with income assistance. And it's important for those on income assistance to file. Because again, you need to file to get your benefits and credits. And it's really important for, you know, those that are that are needing and relying on that, those benefits to file every year on time.

CC: Okay. And you might qualify for even more benefits. You never know.

Nancy: Exactly. And it certainly opens doors to other kinds of benefits that are not given out by the CRA. They're given out maybe by provinces or other federal departments. So it's really opening the door to be able to get other credits or benefits outside of CRA.

CC: Another misconception we often hear is that if someone earns tax-exempt income, they don't need to file a tax return. Is that true?

Nancy: This is also false and for the reason I mentioned earlier that everyone, including those earning tax exempt income, must file a tax return because this allows them to receive benefits and credits.

A really other important thing to note is that benefit and credit payments are retroactive. And what I mean by that when I say retroactive, if you haven't filed, you can receive benefits and credits for past years if you were eligible. So that's why it's important to look at that.

CC: So if I didn't file last year, but I filed this year for last year and this year, I'm like making up for old tax years, then I can potentially get the money from previous years?

Nancy: That's correct.

CC: That's great. That's incentive.

Nancy: Absolutely.

CC: You had said before that there's different types of income that could be considered tax exempt. What are some examples of tax-exempt income? And are there specific forms that someone needs to use if they do earn tax-exempt income?

Nancy: Yes. So there are specific forms. So if you are, and again, I'm going to use the legal term, Status Indian, and live or work on reserve, there are basically two forms that you'll need to complete.

One of the forms is called the T90, which is Income Exempt from Tax under the Indian Act. And this form is used to report income that qualifies for the exemption under the Indian Act. And you must include this with your tax return each year.

It helps the CRA to identify portions of your income that are tax exempt. So the form will outline, you know, what you need to fill out and the portions that are considered tax exempt.

Another important form that you need to complete when talking about earning tax exempt income is the TD1-IN – the Determination of Exemption of an Indian’s Employment Income. So, let me explain what this is.

So you must complete this form when you start a new job. And this is in addition to the standard TD1 form that you would fill out for any employer.

So when you start a new job, you're going to fill out a tax form so the employer knows exactly your tax rate is and they can do their payroll accordingly. So that's why everyone fills out a TD1 when they start a new job.

But if you have exempt income, you also need to fill out a TD1-IN, and that is completed with the employer. These forms should be updated whenever there are changes in your life—for example, if you become a student, have children, get married, become eligible for the Disability Tax Credit, or have a change in an employer. So the TD1-IN gives the employer the necessary information to make sure that they handle your pay based on your tax exempt income.

CC: But if I didn't earn tax exempt income. I don't need the TD1-IN or I have to if I am an Indigenous person?

Nancy: No, you don't have to do it unless, because this is strictly for exempt income.

CC: Okay so for filing tax returns then, does it have to be done every single year?

Nancy: Yes. If it's not, you won't be getting the benefits and credits you're entitled to. And that's a requirement year over year, is that you file your taxes, even if your income is low, if you have no income or tax exempt income.

If you have a partner or a spouse or a common law, they also have to file every year because for example, the Canada child benefit is based on family income. So it's important that both individuals file.

If you don't file on time, your regular benefits could be delayed or adjusted because the information that CRA has on hand is not accurate for the current year. So that's why it's important. And that's why we talk about the filing deadline.

While it might not impact you if you don't owe taxes, it certainly does impact you if you are expecting benefits and you file late.

CC: Right. So, because the benefit calendar starts in July. So that's why we need it filed by the end of April.

Nancy: That’s correct, so we need time for processing the return, calculating the new benefits for the new year. That’s why it’s important to do that in advance, even if you have a zero income or tax-exempt income.

CC: And so if I've missed previous years, is there a way that I can submit those now to make up for previous years and how many years?

Nancy: If you are filing for previous years, you can do so at any time, going back up to 10 years. However, for some years, the return must be filed by paper.

So one tip is, if you are filing your tax return on paper, never put more than one return in the same envelope. You can go to the Community Volunteer Income Tax Program. They do file previous year returns. We do have tax paper forms online that can be downloaded.

We also have a form and I'm, I'll talk about this a little bit more later on is specifically for Indigenous population. It's called the “Let Us Help You Get Your Benefits” form. It is a paper form. But it is specifically sent out to Indigenous communities, it's not available on the internet.

It's only available through community organizations, First Nation, Metis, and Inuit organizations that make it available for their clients.

CC: So one misconception we hear is that filing your tax return means you'll automatically owe money. Can you please help explain how that's not the case?

Nancy: Sure. Filing taxes does not necessarily mean that you're going to owe money. Often, in many cases, especially for those with low income, no income, perhaps someone on income assistance, filing results in a refund or eligibility for benefits and credits.

Now you must file your taxes by April 30th every year, so that you make sure that you keep getting your benefits and credits. This is important because we need the new tax information to make sure that we get the calculation correct for your income because it will determine what the calculation will be for your benefits. And that's true as well for those on income assistance as well.

I have an example of this.

Sarah started working as an 18 year old, and lived and worked on reserve. So she had tax exempt income.

From ages 18 to 21, she didn't file her tax returns. So at age 21, she filed her current return and previous returns at the same time. As a result, she received a back pay of GST/HST credit payments.

If her situation stays the same, she may also receive an enhanced payment under the Canada Grocery and Essentials benefit.

CC: Cool. Are there any other credits or deductions that you might be eligible for as an Indigenous person?

Nancy: Yes, there are credits and deductions that you could be eligible for, not specifically for Indigenous Peoples in general, but benefits and credits that you could be eligible for when you file.

One of the credits that we often will talk about is the Disability Tax Credit. And this is a non-refundable tax credit that helps reduce income tax for people with disabilities, or for those supporting family members who may owe taxes.

A non-refundable tax credit is a credit that reduces taxes you owe, but only to zero. So you can't get a refund from this type of credit.

And I can give you an example of what that looks like. So we'll take Louis, who's 21.

He's got type 1 diabetes and he needs regular insulin therapy. With his medical practitioner or his doctor, he completed the form T2201, which is a Disability tax credit form, and he sent it to the CRA.

Once approved, Louis was able to claim the DTC or the Disability tax credit each year. However, in his situation, since he's still in school and he earns little income, he transfers the unused amount of this credit to his parents who help pay for the supplies related to his diabetes.

Eligibility for the DTC allows Louis to open a Registered Disability Savings Plan, or RDSP, because we love acronyms!

CC: Ha ha ha.

Nancy: It's a long-term savings plan for people with disabilities. Within this plan, the government can add money to it through grants and bonds, helping him grow his savings, even if he contributes very little.

So Louis’ benefits allow him to focus on his health, his studies, and building his independence. These are what the benefits do.

Being eligible for the DTC may help access other federal programs. The DTC-related payments are retroactive, like we talked about previously with other benefits, meaning that amounts from previous years can also be claimed if all the required forms are signed.

CC: Are there any deductions that are specific for Indigenous Peoples or people who live up in the northern areas of Canada?

Nancy: Yes, there is. There's the northern residents deduction.

So those living in the north or remote areas often means there are higher costs for groceries, for heating, for travel. To offset these costs, there is a deduction available to individuals in what is known as a prescribed zone. This means an eligible zone.

To claim this deduction, you need to complete the form T2222, so that's four twos, and submit it with your tax return.

You must have lived in the prescribed zone for at least six consecutive months. So when we talk about tax returns, we're talking about January to December of the year. So six months within that calendar year.

To verify whether your place of residence is located in an eligible zone, you can visit the canada.ca/taxes-northern-residents.

CC: I've heard that the groceries can be pretty pricey up there, like milk is $15.

Nancy: Yes, absolutely. A case of pop can be $40 in some cases, right?

CC: Oh my goodness.

Nancy: Absolutely. Every dollar counts.

CC: So now that we know that filing is important, how important is it to keep your personal information up to date with the CRA?

Nancy: It's very important. Keeping this information current, and when we talk about information, we talk about your address, your marital status, child care. These are all key pieces of information that the CRA needs accurate, up-to-date information to make sure that the benefits and credit payments get to you on time and are accurate.

So if you experience some changes in your life, such as taking care of a new child, getting married, being separated, moving to a new home. This can all affect what you qualify for. And this is why it's important to provide CRA with that information as quickly as possible.

So I'll give you an example if it's helpful. If you move to a northern area, you might qualify for the northern residents deductions. So I'll give Sam as an example.

Sam knew filing taxes was important every year. He didn't realize how much keeping his information up to date with the CRA was important. So when Sam moved to a northern community, he forgot to update his address. No big deal, right?

Well, almost. It turns out that he now qualified for the northern residents deduction, but without updating his address, he nearly missed out on it.

So a little later, Sam's mom starts caring for his daughter. Once Sam updates his child care information, the Canada Child Benefit went straight to the right person, the one who's actually supporting his little girl.

That's when it clicked for Sam that these life changes, when they happen, it's important that everyone understands that CRA needs to know when these changes happen because it does affect their benefits and their credits.

By keeping his address, his marital status, and the child care information current, Sam has made sure that he's always received the right payments and right on time. Because if someone else is caring for your child, like a grandparent. Updating our information ensures that the right person is going to be getting the Canada Child Benefit.

CC: Yeah.

Nancy: And one thing that's important to note too is that some custody changes are temporary. So in those cases, the temporary caregiver can apply for the CCB during that time. So that's why when we're talking about timing, it's important as these changes happen to notify the CRA, because you don't want to be in a difficult situation.

A really important factor here as well, is that if you're in a difficult situation and you're worried for your physical, mental, financial security. Whether it be a spouse or a family member, the CRA is here to help you and is committed to making sure that you continue to get support.

If you don't have access to all your personal information, we can still help you update your details to make sure that you receive what you're entitled to. You'll never be required to contact an abusive person or an organization to get information for the CRA. Those are really important things to be aware of.

CC: A question we get a lot is to explain what common law means for taxes. Can you please help explain this?

Nancy: Sure, absolutely. The CRA defines common law as a conjugal partnership where you've lived together for 12 consecutive months. So this applies even if you're not legally married.

A lot of people think you have to live together for years, but it's really only 12 consecutive months. But common law could be determined sooner than that if a child is born between the partners before those 12 consecutive months. So that's important to note.

So what does the CRA consider a conjugal partnership to be? So think of it this way. It's not about who you live with. It's about the relationship you have.

A conjugal partner means two people are in a marriage-like committed romantic relationship. They support each other financially, emotionally, and they share their lives the way that a couple would.

CC: So not roommates.

Nancy: Not roommates. Exactly. Exactly, good clarifying point.

The 12 months don't have to be in the same calendar year. They just need to be continuous months. So not necessarily only between January 1st and December 31st, which we call the calendar year. If a couple begin living together, for example, in November of 2026 continuously, they would be in a common law relationship by November of 2027.

The other important thing to know is that the 12 months can include short separations or breaks of less than 90 days, so less than three months, if it's due to a problem in the relationship itself. If you break up for more than 90 days, the clock resets.

So that's important to know. That will actually restart that 12-month consecutive period to determine your status.

CC: Okay. I had no idea.

Nancy: So what wouldn't count is if a couple are together in Iqaluit, but one partner has to have long-term stays throughout the year in Montreal due to work, or maybe for healthcare purposes.

Because they're still committed in a romantic relationship during those breaks, there are no clocks that are reset.

CC: Okay, got it. They're still in a relationship. They haven't broken up.

Nancy: Correct.

CC: They're just separated because of circumstance.

Nancy: Exactly.

CC: Well, thank you so much for coming today Nancy!

Nancy: Great thank you.

CC: Thanks again to our guest, Nancy, for joining us on part 1 of our series for Indigenous people!

We hope we’ve highlighted the importance of filing a tax return to get the refund, benefit, or credit amounts that you’re eligible for. And don’t forget to keep your personal info with the CRA up-to-date year-round!

In part 2, we’ll go over the options and documents you need to file a tax return, and what you need to know if you get a letter from the CRA.

For more information about taxes and benefits for Indigenous people, go to canada.ca/taxes-benefits-indigenous. You can also follow us on Facebook, X, or Instagram @CanRevAgency, and listen to our previous episodes to stay informed on all things taxes.

Thanks for listening to this episode, and stay tuned for part 2. Until next time! I’m your host CC. Stay safe, and do your taxes.