It’s tax season. Here’s what to know.
March 16, 2026
If you are a Claimant in the First Nations Child and Family Services and Jordan’s Principle Settlement and received compensation, you may be wondering how it will impact your taxes. Here’s what you need to know.
You do not have to pay income tax on your compensation money
Claimants who receive compensation from this Settlement do not have to pay Canadian federal, provincial or territorial income tax.
This means you do not need to report your compensation as income anywhere on your tax return, including on your:
- T1 form: Income Tax and Benefit Return
- Let Us Help You Get Your Benefits – Indigenous credit and benefit short return
- Form T90: Income Exempt from Tax under the Indian Act
However, it’s important to know that any purchases or investments you made with your compensation money may have tax implications under general tax laws – for example:
- If you purchased a non-registered Guaranteed Income Certificate (GIC) with your compensation payment, the interest you earned on that GIC is considered investment income, and you will need to pay tax on the interest portion only. In this case, you should receive a Form T5: Statement of Investment Income from your financial institution and will need to report the investment income on your T1 Form.
- Certain types of GICs and other investments are tax-sheltered, meaning you do not need to pay tax on the investment income until you withdraw your money. If you’re not sure whether you need to report any interest or investment income you made on your compensation money, check with a financial professional.
Tax tip: Some financial institutions offer GICs through on-reserve branches, which may allow you to earn interest tax-free. Speak to your branch to learn if this applies to you.
For information on taxation specific to your situation, please contact a tax advisor who is familiar with First Nations taxation. If you choose to hire a professional financial advisor, you will have to pay their fees yourself.
