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 if 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 2014, you can claim a deduction equal to 50% of the U.S. Social Security benefits received in 2014.
This 50% deduction also applies to you if you are receiving benefits related to a deceased person and 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 their 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 2014, been a resident of Canada and received such benefits.
Completing your tax return
Claim 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
- Income Tax Folio S5-F2-C1, Foreign Tax Credit
- IT-506, Foreign Income Taxes as a Deduction from Income
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