Line 256 - Exempt foreign income

If you reported foreign income on your return (such as support payments you received from a resident of another country and reported on line 128) that is tax-free in Canada because of a tax treaty, you can claim a deduction for it. If you do not know whether any part of the foreign income is tax-free, contact us.

Under the Canada-United States Tax Treaty, you can claim a deduction equal to 15% of the U.S. Social Security benefits, including U.S. Medicare premiums, you reported as income on line 115.

If you have been a resident of Canada and have received U.S. Social Security benefits continuously during the period starting before January 1, 1996, and ending in 2012, you can claim a deduction equal to 50% of the U.S. Social Security benefits received in 2012.

This 50% deduction also applies to you if you are receiving benefits related to a deceased individual and if you meet all the following conditions:

• The deceased person was your spouse or common-law partner immediately before their death.
• The deceased person had, continuously during a period starting before 1996 and ending immediately before the person's death, been a resident of Canada and received benefits to which paragraph 5 of Article XVIII of the Canada-United States Tax Treaty applied.
• You have, continuously during a period starting at the person's time of death and ending in 2012, been a resident of Canada and received such benefits.

Completing your tax return

Enter on line 256 the amount of your foreign income you included in your income that is non-taxable in Canada because of a tax treaty with a foreign country.

Forms and publications

• General Income Tax and Benefit Package - Guide, return and schedules
• Form T2209, Federal Foreign Tax Credit
• Form T2036, Provincial or Territorial Foreign Tax Credit
• IT-270, Foreign Tax Credit
• IT-506, Foreign Income Taxes as a Deduction from Income

Related topics

• International and non-resident taxes
• Tax Treaties - Department of Finance