ARCHIVED CD 2009-028: Information Notice to Employees

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Status Indian Employee Working on a Reserve - Anywhere in Canada Except the Yukon

In the past, a Status Indian employee working on a reserve did not have his exempt earnings appear on his T4. Instead, client organizations were asked to prepare letters for their Status Indian employees identifying the amount of income earned, union dues deducted and pension contributions deducted while working on a reserve. Each Status Indian employee had to submit this letter to the Canada Revenue Agency (CRA) with his tax return.

Starting with the 2009 T4 statements, the tax exempt income earned by a Status Indian employee while working on a reserve will be reported in box 71 "Status Indian employee" of the "Other information" area.

Employees are required to fill out form TD1-IN (Determination of a Status Indian's Employment Income) which provides the necessary authorization to waive both the federal and provincial income tax. The form can be found at the following Internet address:

TD1

In addition to the above form, every employee has to ensure that he has already completed a federal TD1 (Personal Tax Credits Return) form and a provincial TD1 form for his province of employment. By completing these forms, the employee would continue to receive other tax credits (e.g. spouse or common-law partner amount, amount for an eligible dependent) he could be entitled to if, at some point in time, he does not work on a reserve. The forms are available at the following Internet addresses:

Federal and Provincial TD1 forms

TD1 forms

Where a Status Indian employee was entirely exempt for the full taxation year, boxes 14 (Employment Income), 20 (RPP Contributions) and 44 (Union Dues) will be blank. The full exempt earnings will be reported in box 71 "Status Indian employee" of the "Other information" area on the T4 statement.

Where a Status Indian employee was only partially exempt during the taxation year, the taxable portion of the earnings will be reported in box 14 (Employment Income) and the tax exempt portion in box 71 (Status Indian employee) of the "Other information" area on the T4 statement. However, box 20 (RPP Contributions) and box 44 (Union Dues) will show the full contributions for the taxation year.