Here's the thing about taxes that trips a lot of people up: even if you don't owe anything, filing a return unlocks money that's owed to you. The GST/HST credit, Canada Child Benefit, provincial benefits — none of these show up unless you file.
Filing isn't about paying the government. For many Indigenous people, it's about collecting what you're entitled to.
Why you should file (even with exempt income)
If your employment income is earned on reserve and exempt under Section 87, you may not owe federal or provincial income tax. But filing a return is still the only way to access:
- GST/HST credit — up to $519/year for a single person (2024), paid quarterly
- Canada Child Benefit (CCB) — up to $7,787 per child under 6 and $6,570 per child aged 6-17 (2024). This is significant money
- Canada Workers Benefit — refundable tax credit for low-income workers
- Provincial credits — climate action payments, sales tax credits, rental credits (varies by province)
- RRSP and TFSA contribution room — CRA calculates your RRSP room from your filed return
- GIS and OAS supplements — for elders, filing is required to receive the Guaranteed Income Supplement
A single parent with two young children who doesn't file could be leaving $12,000-15,000 per year on the table between the CCB and GST credit alone. If you haven't filed in several years, you can file up to 10 years back and collect retroactive payments.
Section 87 and the T90 form
Section 87 of the Indian Act exempts certain income from taxation when it's earned on reserve or connected to reserve. The most common situation: employment income earned by a Status Indian working for an employer situated on reserve.
When your income is exempt, it gets reported differently:
- Your employer should issue a T4 with exempt income in Box 71 (Indian exempt employment income)
- You report this income on the T90 form (Income Exempt from Tax under the Indian Act)
- The T90 amount appears on your return but is not taxed — it shows CRA your total income for benefit calculations without creating a tax bill
The rules around Section 87 exemption aren't always straightforward. The key connecting factors include:
Employment income: Generally exempt if you're a Status Indian, working for an employer located on reserve, and the duties are performed on reserve. There are also guidelines (the "Guideline 2" and "Guideline 4" tests from CRA) that can make off-reserve income exempt in certain situations — for example, if the employer is resident on reserve and the duties benefit reserve residents.
Self-employment income: May be exempt if the business is located on reserve and the income is earned on reserve. More complex — worth getting advice.
Investment income: Interest on deposits held at on-reserve financial institutions (like Peace Hills Trust branches on reserve) has a stronger exemption argument. Investment income from off-reserve institutions is generally taxable.
If you're unsure whether your income qualifies, a tax professional familiar with Section 87 is worth the consultation.
Working off-reserve for a non-Indigenous employer generally means your income is fully taxable, even if you're a Status Indian. The exemption depends on connecting factors between the income, the employer, and the reserve — not just your status. Getting this wrong can lead to unexpected tax bills or reassessments.
Filing for the first time
If you've never filed before, it's simpler than you think. Here's the walkthrough:
- Gather your documents: T4 (employment income), T5 (investment income if any), T4A (benefits, scholarships), any receipts for deductions. If your income is exempt, make sure you have the T4 showing Box 71
- Get your CRA account set up: Go to My CRA Account online. You'll need your SIN and some personal info. If you've never filed, you may need to call CRA to set up access
- Use free tax software: Wealthsimple Tax (online, free), StudioTax, or TurboTax Free all work. They walk you through each step
- Enter your information: The software asks questions in plain language. For exempt income, look for the T90 section or "Indian exempt income"
- File electronically: NETFILE lets you submit directly to CRA. You'll get your assessment in about two weeks
If you haven't filed in several years, you can catch up. CRA accepts returns going back up to 10 years. File them in order, starting with the oldest year.
Gathering old documents: If you don't have your old T4s, your employer may have copies. CRA also has records — once you have My CRA Account access, you can see tax slips they've received on your behalf.
Retroactive benefits: Once CRA processes your late returns, they'll calculate any benefits you were owed and issue retroactive payments. This can be a substantial lump sum — sometimes thousands of dollars.
No penalties if you don't owe: Late filing penalties only apply if you owe tax. If your income was exempt or below the basic personal amount, there's no penalty for filing late — just uncollected benefits.
Free tax clinics
Every year, the CRA's Community Volunteer Income Tax Program (CVITP) runs free tax clinics across the country. Volunteers prepare and file returns at no cost for people with modest income and simple tax situations.
- Available in person and virtually (phone or video)
- Many Indigenous organizations and Friendship Centres host clinics
- Volunteers are trained on Section 87 and T90 filing
- No cost, no judgement, no sales pitch
Search "free tax clinic" on the CRA website or call 1-800-959-8281. Your band office or local Friendship Centre can often point you to the nearest one. Clinics typically run from March through April, but some operate year-round.
What happens if you don't file
If you owe tax and don't file, CRA charges penalties and interest. But even if you don't owe tax, not filing means:
- Benefits stop — CRA suspends GST credit and CCB payments if you don't file. They resume once you catch up, but you'll have a gap
- No RRSP room calculated — CRA uses your filed return to determine RRSP contribution room
- GIS interruption — elders relying on the Guaranteed Income Supplement must file annually to keep receiving it
- Potential CRA contact — if CRA has records showing you earned income (from T4s your employer filed), they may eventually assess you themselves, and that assessment is rarely in your favour
Getting started
- If you've never filed: Start with the most recent tax year. Gather your T4 and use free software or visit a tax clinic
- If you're behind several years: File the oldest year first and work forward. Check with a tax clinic for help catching up
- If you've been filing but skipping the T90: You may be missing benefit calculations. Consider refiling to include exempt income
- Set a reminder for next year: Tax season opens in February. File early, get your refund and benefits early
Filing takes an hour or two once you have your documents. The return on that time — hundreds or thousands of dollars in benefits — makes it one of the highest-value things you can do for your finances each year.
Last updated: March 2026