TaxTips.ca - Non-Taxable Income (2024)

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Amounts which are not required to be included in income fortax purposes, so are not reported on a personal tax return, include:

	GST/HST credits
	Canada Child Benefit (CCB) payments and related provincial and territorial child benefits and credits
	disability insurance proceeds, *depending on how the premiums were paid*
	most gifts and inheritances, but there may still be tax consequences
	most types of strike pay received from your union, even if you perform required picketing duties
	most life insurance following someone's death
	compensation received from a province or territory for victims of a criminal act or a motor vehicle accident
	gambling winnings, unless they are carried out in a sufficiently commercial manner to constitute a source of business income for the purposes of the Income Tax Act - see Tax Court of Canada Duhamel c. La Reine, 2022 CCI 66 as well as Financial Post article Poker champion comes up a winner in high stakes showdown with CRA by Jamie Golombek, CPA, CA, CFP, CLU, TEP
	lottery winnings, and raffle prizes, unless the circ*mstances deem that the proceeds are considered income from employment, business or property, or a prize for achievement. For instance, prizes from employer-promoted contests could be considered employment income. See Folio S3-F9-C1 below. The cost basis of property which has been won as a prize in connection with a lottery scheme is deemed by s. 52(4) of the Income Tax Act (ITA) to be the fair market value at the time it is won. This means that there is no capital gain if the prize is subsequently sold, unless it is sold for more than the amount deemed to be the cost basis. If a person decided to sell the right to the prize, (e.g., sell a winning $1 million lottery ticket for $900,000), s. 40(2)(f) of the ITA deems any gain or loss from this transaction to be nil.
	subject to certain exceptions (see Folio S3-F9-C1 below), an amount received as a windfall. Factors which indicate that an amount received is a windfall, which are based on The Queen v. Cranswick, [1982]CTC 69, 82 DTC 6073 (FCA):

the taxpayer had no enforceable claim to the payment,

the taxpayer made no organized effort to receive the payment,

the taxpayer neither sought after nor solicited the payment,

the taxpayer had no customary or specific expectation to receive the payment,

the taxpayer had no reason to expect the payment would recur,

the payment was from a source that is not a customary source of income for the taxpayer,

the payment was not in consideration for or in recognition of property, services or anything else provided or to be provided by the taxpayer, and

the payment was not earned by the taxpayer as a result of any activity or pursuit of gain carried on by the taxpayer and was not earned in any other manner.

Some types of income are not taxable, but must still bereported on the income tax return and included in income for tax purposes, thendeducted later. Because of this, these amounts may affect some tax credits,income-tested benefits, and clawbacks. The types of income include the following, which are reported on line14700 (line 147 prior to 2019) other payments:

	workers' compensation benefits from T5007 slip
	social assistance payments
	net federal supplements from T4A(OAS) slip - Guaranteed Income Supplements (GIS) for Canadian seniors, and the Allowance

The line 14700 income is not deducted until line 25000 (line 250 prior to2019), which means it is included in line 23400 (line 234 prior to 2019), net income before adjustments, which is used to calculate clawback of OAS or employment insurance. Line 23400 is also used in the calculation of the CanadaWorkers Benefit (CWB) (renamed for 2019 from the Working Income TaxBenefit (WITB), medical expense tax credit, and many other tax credits.

A list of income that is not taxed can be found inthe Income Tax Act, in s.81, amounts not included in income.

See also our article on taxable income, net income and total income for tax purposes.

Canada Revenue Agency (CRA) Resources

Amounts that are not taxed

Income Tax Folio S3-F9-C1: Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime

Revised: January 25, 2024