Line 426 - Overseas employment tax credit

As a resident of Canada, you may be entitled to claim the overseas employment tax credit (OETC) for qualifying income (to a maximum income of $100,000 for a full year ) from employment outside Canada.

In general, to qualify for the OETC, you must have performed all or substantially all (at least 90%) of your employment duties outside Canada for a period of more than six consecutive months (all or part of which were during the tax year for which you are claiming the credit) with a specified employer.

Your duties must also have been in connection with a contract (or for the purpose of obtaining a contract) under which your employer carried on a business outside Canada conducting one of the following activities:

• the exploration for or exploitation of petroleum, natural gas, minerals, or other similar resources;
• any construction, installation, agricultural, or engineering activity;
• any activity performed under contract with the United Nations (UN); or
• any activity performed to obtain a contract to undertake any of the above activities.

Note
Work you performed under an international development assistance program of the Canadian International Development Agency (CIDA) does not qualify for the OETC.

For more information about this credit, see Interpretation Bulletin IT497, Overseas Employment Tax Credit.

Completing your tax return

To request your OETC, attach to your return a completed Form T626, Overseas Employment Tax Credit.

On line 426 of your Schedule 1, enter the amount from line 17 of Form T626.

Be sure to also request the provincial or territorial overseas employment tax credit by completing Form 428, which can be found in the general income tax and benefit package for your province or territory of residence.

Forms and publications

• General Income Tax and Benefit Guide
• Form T626, Overseas Employment Tax Credit
• Interpretation Bulletin IT497, Overseas Employment Tax Credit

Related topics

• Temporarily outside Canada