Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Can an individual who is an Indian under the Indian Act qualify for the Canada Chid Benefit if they are not a Canadian citizen?
Reasons: Recent changes to definition of eligible individual in section 122.6 of the Income Tax Act effective July 2016.
Author: Merrigan, Lori
December 29, 2016
Re: Canada Child Benefit Eligibility
Further to our meeting with you and members of your council on Friday, December 2, 2016, we are writing to confirm our views on whether an individual who is an Indian, as that term is defined in subsection 2(1) of the Indian Act, may qualify for the Canada Child Benefit even if that individual is not a Canadian citizen.
Previous Canada Child Tax Benefit – Prior to July 1, 2016
The definition of “eligible individual” in the Income Tax Act describes certain conditions that must be met in order for an individual to be eligible for the previous Canada Child Tax Benefit or the new Canada Child Benefit. The previous definition under the Canada Child Tax Benefit required that the “eligible individual” or their spouse or common-law partner be a Canadian citizen. Individuals who were Indians for purposes of the Indian Act but were not citizens of Canada did not qualify for this tax benefit. As an example, an American citizen who had registered as an Indian under the Indian Act and had been working and living in Canada would not have qualified for the Canada Child Tax Benefit despite meeting all other requirements with respect to an eligible child.
New Canada Child Benefit – Effective July 1, 2016
Effective July 1, 2016, the definition of “eligible individual” under the Canada Child Benefit now includes individuals who are not Canadian citizens but who are Indians within the meaning of the Indian Act. This means that Indians, whether Canadian citizens or not, are eligible to receive the Canada Child Benefit where all other eligibility requirements are met.
These requirements include that each “eligible individual” must:
* live with the child, and the child must be under 18 years of age;
* be the parent who is primarily responsible for the care and upbringing of the child; and
* be a resident of Canada for tax purposes and, therefore, would be required to file a T1 General – Income Tax Return.
These eligibility requirements can be found on the Canada Revenue Agency website at http://www.cra-arc.gc.ca/E/pub/tg/t4114/t4114-e.html#eligible. The addition of Indians within the meaning of the Indian Act to the definition of “eligible individual” applies only as of July 1, 2016 and does not apply retroactively to the previous Canada Child Tax Benefit.
We trust that these comments will be of assistance.
Roger Filion, CPA, CA
Non-Profit Organizations and Aboriginal Tax Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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