You do not have to report certain amounts in your income, including the following:

• Any GST/HST credit or Canada child tax benefit payments, as well as those from related provincial and territorial programs;
• Child assistance payments and the supplement for handicapped children paid by the province of Quebec;
• Compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident;
• Most lottery winnings;
• Most gifts and inheritances;
• Amounts paid by Canada or an ally (if the amount is not taxable in that country) for disability or death due to war service;
• Most amounts received from a life insurance policy following someone’s death;
• Most payments of the type commonly referred to as strike pay you received from your union, even if you perform picketing duties as a requirement of membership; and income earned on any of the above amounts (such as interest you earn when you invest lottery winnings) is taxable; and
• Most amounts received from a tax-free savings account (TFSA). For more information, see Guide RC4466, Tax-Free Savings Account (TFSA), Guide for Individuals.

 Non-Taxable Amounts still Reported on Income Tax Returns

There are certain amounts that must be included in income, and then deducted from income on ones tax returns. This is done to reduce or eliminate some benefits the taxpayer would receive had the amount not been included in income, and then removed as a deduction.

The following would be reported on Line 147 (other payments)

• Worker’s compensation benefits (T5007 slip);
• Social assistance payments; and
• Net federal supplements from T4A (OAS) slip.

Line 250 deducts the above from Line 147. This means it is included on Line 234 which is net income before adjustments. Line 234 is used to calculate the working income tax benefit, the medical expense tax credit, and many more.

Windfalls

Cranswick v. The Queen, [1982] CTC 69, (FCA)

If you receive money, the above Federal Court of Appeal case will dictate whether that money is a windfall and thus non-taxable. The factors that must all be present are:

1. Taxpayer had no enforceable claim to the payment;
2. Taxpayer made no organized effort to receive the payment;
3. Taxpayer neither sought nor solicited the payment;
4. Taxpayer had no expectation to receive the payment;
5. Taxpayer had no reason to expect the payment would recur;
6. Payment was from a non-customary source of income;
7. Payment was not in consideration for or in recognition of property, services or anything else provided or to be provided by the taxpayer; and
8. 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.

CRA Resources

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

See the Canada Revenue Agency (CRA) page on amounts that are not taxed.

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