Income sources Canadians typically don't have to pay tax on.

H&R Block Canada identifies 15 types of income that are generally not taxable, and a 2025 survey found that 63% of Canadians feel unsure about navigating tax credits and benefits.

Tax season is approaching and H&R Block Canada says many people are unsure which income streams are taxable. A 2025 survey from H&R Block found 63% of Canadians lack confidence navigating tax credits and benefits and 50% did not know whether to expect a tax return. The company highlighted 15 types of income that typically are not taxed in Canada. Experts note that some non-taxable amounts may still need to be reported for benefit eligibility or compliance. Common income types not taxed in Canada: - Gifted money: Funds received as a gift are not considered taxable income, though income earned later from those funds is taxable and the CRA may request documentation. - Inheritance: Cash or property received by inheritance is generally not taxable, but any income earned after receipt is taxable. - Life insurance payouts: Most death benefits paid to beneficiaries are tax-free. - Lottery and prize winnings: Most winnings from lotteries, contests, or casinos are not taxed in Canada; winnings earned as a business activity would be treated differently, and foreign jurisdictions may withhold taxes on overseas gambling winnings. - Child support payments: Payments received under an agreement or court order are not taxable to the recipient and are not tax deductible for the payer. - Income earned inside a TFSA: Interest, dividends, and capital gains inside a Tax-Free Savings Account are tax-free even when withdrawn. Summary: Reporting non-taxable income can still affect eligibility for credits and benefits and supports compliance with Canada Revenue Agency requirements. Undetermined at this time.