With an employer, bank, or advisor
Section 87, the right question
The question that opens it up: "How does this work with my Section 87 status?"
What to say
To an employer about your pay
“My employment may be tax-exempt under Section 87. Can my income go in Box 71 on the T4?”
To any advisor recommending an RRSP
“My employment income is exempt — how does an RRSP work with my Section 87 status before I contribute?”
To a bank about an investment
“Is this investment situated on reserve? How does Section 87 apply to the income it earns?”
What's yours by right
- Section 87 exempts the personal property of a Status Indian situated on a reserve from tax.
- For employment income, what matters is the connecting factors: where you do the work, where your employer is, who the work serves, where you live.
- Investment income is generally not exempt unless the investment itself is situated on reserve.
- File your taxes even when your income is exempt — benefits like the GST credit and CCB are calculated from your return.
Watch for
Box 71 on a T4 doesn’t guarantee CRA agrees, and a blank box doesn’t mean you can’t claim it. Know your own situation.
If your income is exempt, a TFSA is almost always a better fit than an RRSP — there’s no tax to defer.
Keep records — pay stubs, your contract, anything showing where your duties are performed — in case CRA asks.
This card is a plain-language summary, not advice. The full guide has the detail and the caveats — read it when you have a moment that isn't this one.