Non-Taxable Income at the Federal Level (Canada)

Social Benefits

• Canada Child Benefit (CCB)

• GST/HST Credit

• Canada Workers Benefit (CWB)

• Other refundable tax credits (e.g., Guaranteed Income Supplement, disability benefits — some are non-taxable).

Compensation & Insurance

• SAAQ benefits for bodily injuries (Quebec auto insurance board)

• IVAC benefits (crime victim compensation)

• Life insurance proceeds received upon death

• Compensation for bodily injury damages (e.g., court settlements for accidents or illness)

• Some CNESST benefits (Quebec workplace safety board):

  • Income replacement indemnities → taxable

  • Preventive withdrawal benefits → non-taxable

  • Medical, rehabilitation, death-related benefits → non-taxable

Education

• Scholarships, bursaries, and grants (tax-exempt if tied to an eligible program; partial exemption otherwise)

• Student loans (never taxable)

Miscellaneous

• Capital gain on principal residence (fully exempt)

• Gifts, inheritances received from individuals (non-taxable)

• Lottery and gambling winnings (Lotto Max, etc.)

• Child support payments (after 1997 → non-taxable; spousal support → taxable for recipient, deductible for payer)

Non-Taxable Income in Québec

Social Benefits (Retraite Québec / RAMQ)

• Family Allowance (Soutien aux enfants)

• Solidarity Tax Credit

• Supplement for Handicapped Children

• Other provincial family-related benefits

Compensation

• SAAQ benefits (non-taxable for bodily injuries)

• IVAC benefits (non-taxable)

• Some CNESST benefits: same rules as at the federal level

• Employment Insurance (EI) maternity/parental benefits → taxable

  • ⚠ Exception: Preventive withdrawal allowance paid by CNESST → non-taxable (both federally and provincially)

Miscellaneous

• Principal residence capital gains (exempt, same as federal)

• Lotteries, gifts, inheritances (non-taxable)

• Life insurance proceeds received at death (non-taxable)

Special Cases to Note

• CNESST:

  • Income replacement benefits → taxable (federal & Quebec)

  • Preventive withdrawal → non-taxable

  • Medical/rehabilitation/death benefits → non-taxable

• Support payments:

  • Child support → non-taxable

  • Spousal support → taxable for recipient, deductible for payer

• Scholarships:

  • Fully exempt if for full-time post-secondary studies

  • Partial exemption if not tied to an eligible program

Here is a clear comparative table of Quebec vs. Federal of the main non-taxable income:

Non-Taxable Income – Canada vs Québec

Category	Canada (Federal)	Québec
Child Benefits	Canada Child Benefit (CCB)	Family Allowance (Soutien aux enfants)
Refundable Credits	GST/HST Credit, Canada Workers Benefit (CWB)	Solidarity Tax Credit, Supplement for Handicapped Children
CNESST Compensation	– Income replacement → taxable – Preventive withdrawal → non-taxable – Medical, rehabilitation, death benefits → non-taxable	Same rules as federal
SAAQ Compensation	Non-taxable (for bodily injuries)	Non-taxable (for bodily injuries)
IVAC Compensation	Non-taxable	Non-taxable
Life Insurance	Death benefits received → non-taxable	Same
Bodily Injury Damages (court awards, settlements)	Non-taxable	Non-taxable
Education	– Scholarships/grants tax-exempt if for eligible post-secondary programs – Student loans → non-taxable	Same treatment
Principal Residence	Capital gain exempt	Capital gain exempt
Gifts / Inheritances	Non-taxable	Non-taxable
Lotteries & Gambling	Non-taxable (Lotto Max, etc.)	Non-taxable
Spousal/Child Support	– Child support (after 1997) → non-taxable – Spousal support → taxable	Same treatment
Employment Benefits	Certain benefits are non-taxable (employer-paid health insurance, reasonable mileage reimbursement, work-related training, etc.)	Same rules

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