Tax Tip: Canadian forces personnel and police deduction

If you are a member of the Canadian Forces or Canadian Police Services, you may qualify for a special deduction. This deduction exempts income that you have earned in moderate- or high-risk operations from income tax.

To qualify, you must have earned income from an operation outside of Canada, and the Department of Finance must have included the mission on its list of moderate or high-risk missions. For example, as of 2015, the CRA considers that Operation Afghan Assist in Mazar-e-Sharif, Afghanistan and Operation Foundation in Qatar both qualify, along with several other missions.

The Department of Finance updates its list of qualifying missions on a regular basis. Alternatively, you can look at your T4 slip to see whether you qualify for this special deduction. If at the bottom of the slip you have any income marked with code 43, that income is exempt from income tax.