Non-Taxable Income Types Under Canadian Law

Some types of money you don't count as "income" for tax purposes😋, according to Canadian law. This means you don't include them when you fill out your tax return. Here are some common examples:

• Most gifts and inheritances;

• Most lottery winnings;

• Winnings from betting or gambling for simple recreation or enjoyment;

• Most payments of the type commonly referred to as strike pay (even if performing picketing duties as a requirement of membership);

• Most amounts received from a life insurance policy following someone’s death;

• Compensation paid by a province or territory to a victim of a criminal act or a motor vehicle accident;

• Amounts paid by Canada or an allied country (if the amount is not taxable in that country) for disability or death of a war veteran due to war service;

• RCMP pensions or compensation paid in respect of injury, disability, or death;

• Elementary and secondary school scholarships and bursaries;

• Post-secondary school scholarships, fellowships and bursaries for a program in which the taxpayer is enrolled full-time;

• Income of First Nations people, if earned on a reserve;

• The Goods and Services Tax or Harmonized Sales Tax credit (GST/HST credit);

• The Canada Child Benefit as well as payments from related provincial or territorial programs;

• The Climate Action Incentive payments for residents of eligible provinces;

• Child assistance payments and the supplement for handicapped children paid by the province of Quebec; and

• Most amounts received from a Tax-Free Savings Account (TFSA).

Note, Income earned on any of the above amounts (such as interest earned when investing lottery winnings) is taxable.