The Canada Revenue Agency (CRA) doesn't tax all income equally. Some money you receive is completely tax-free, while other amounts are only partially taxable. In 2026, knowing which income the CRA doesn't tax can help you avoid overpaying or missing deductions you're entitled to. Common non-taxable income includes gifts, most inheritances, lottery winnings, life insurance proceeds, and certain government benefits like the Canada Child Benefit. The CRA distinguishes between "income" and "receipts." Not everything you receive counts as taxable income in their eyes. Understanding this difference can save you money when you file your 2026 return. Money or property you receive as a gift is not taxable income in Canada. This applies whether the gift comes from a family member, friend, or anyone else. Similarly, most inheritances are not subject to income tax when you receive them. However, this rule has an important exception: if you inherit investments or property that later generate income (like rental property or dividend-paying stocks), that income becomes taxable. Lottery prizes, scratch-ticket winnings, and casino jackpots are completely tax-free in Canada. This is one of the few places where your luck doesn't result in a tax bill.
No, you don't pay income tax on the inheritance itself. However, if the inherited property later generates income (like rental income or investment returns), that income is taxable.
No, lottery prizes are not taxable in Canada. You don't report them on your tax return, and the CRA doesn't expect to see them.
Generally, no. Life insurance payouts to beneficiaries are not taxable income. The only exception is if the policy was sold or transferred for money before the payout occurred.
Some are, some aren't. Health insurance premiums paid by your employer are not taxable, but cash bonuses and most other compensation are. Your T4 slip shows which benefits are taxable.
The Home Buyers' Plan allows first-time buyers to withdraw up to $35,000 from an RRSP tax-free. Otherwise, RRSP withdrawals are fully taxable in the year you withdraw them.