Employment income earned on a reserveIf you have Status Indian and are exempt from paying taxes, you must indicate this in the program. This will allow the program to exempt from tax the income that you earned on a reserve.
Please complete the first step as follows:
1. On the left-side menu of the " Interview " tab, select "Interview setup".
2. On the screen to your right, check the box for "Tax return for a Status Indian" and click "Next" at the bottom of the page.
3. Return to the left-side menu on the " Interview " tab and select "Status Indian".
4. On the page that appears on the right entitled "Status Indian exemptions", answer the question "Please confirm that you are a Status Indian" you must answer "Yes" because you are a Status Indian.
Quebec residents must capture their information on "Quebec prescription drug insurance plan". In this topic, you must specify your situation by selecting the option "4 - Exceptions, Quebec prescription drug insurance plan, all year" and clarify by choosing "Registered Indian (code 24)".
For employment income earned on a reserve, please follow these steps:
A) You received a T4 slip with an amount in Box 71. If you are a resident of Quebec, you also received an RL-1 slip with an amount in Box R. You will find Box 71 of the T4 slip at the bottom of the "T4 - Statement of Remuneration Paid" page, and for Quebec residents it is called "T4 - Statement of Remuneration Paid (RL-1) with QPP contributions". In the section entitled "Other information (click on the triangle to see the list of choices)", choose the option "Box 71 - Indian (exempt income) - Employment (RL-1, box R)" and enter the amount in the field to the right. The entry in this box automatically applies to Quebec residents as well.
B) Since employment income earned on a reserve is exempt from tax, there is no amount in Box 14 of the T4 slip or in Box A of the RL-1 for Quebec residents. However, your income is reported in Box 71 of the T4 and in Box R of the RL-1.
C) Employment insurance (EI) premiums are not taxes and are not exempt. Therefore, there would be EI premiums withheld at source by your employer and this amount will be reported in Box 18 of the T4, as well as insurable earnings which must be reported in Box 24 of the T4 slip.
D) You do not have to pay contributions to the CPP/QPP, unless the employer has elected to contribute, in which case the amount of contributions will be shown in Box 16 or 17 (and for residents of Quebec in Box B of the RL-1), and the QPP pensionable earning will be reported in Box 26 of the T4 slip (and for Quebec resident in Box G of the RL-1).
E) However, for residents of Quebec, you must pay contributions to the QPIP (as shown in Box H of the RL-1 slip) and the PPIP insurable earnings will be reported in Box I of the RL-1 (Box 56 of the T4 slip).
Your employment income earned on a reserve will not be entered on line 10100 of the Federal return. However, for residents of Quebec, the employment income will be reported on line 101, but will be deducted on line 293 of the Quebec return.
NOTE: If you have no taxable income at the federal level, please check the "No income to report in 2021 " in the "Interview setup". Otherwise, you will not be able to file your federal return using NETFILE.
In addition, for Quebec residents, no premium will be calculated for the Quebec prescription drug insurance plan and code 24 will be entered in the box 449.
Under the "Review" tab, a warning message will appear regarding the pensionable earnings; please ignore it.
We suggest you visit the CRA's website to find more information on Canadian Status Indians, by clicking on the following link:https://www.canada.ca/en/revenue-agency/services/aboriginal-peoples/indians.html
For residents of Quebec, consult the following link:
ID: 20211102160305CA.xml
Webpage: KPA390-20211102160305CA.htm