North residents deductions are special tax deductions available to residents who live in remote areas of northern Canada to help with the additional costs of living in those areas.
How much you can deduct depends on where you live. Two different “zones” are designated by the CRA:
- prescribed northern zone (Zone A): you are eligible for full norther residents deduction
- and prescribed intermediate zone (Zone B): you are eligible for half of the amount
There are two deductions you may be able to claim:
- a residency deduction for having lived in a prescribed zone; and
- a deduction for travel benefits you received from employment in a prescribed zone that was included in the income.
The deduction for travel benefits may only be claimed by an employee, not related to the employer, who received taxable travel benefits while employed in a designated area as per the T4 slip.
To qualify for northern residents deductions, you must have lived, on a permanent basis, in a prescribed northern or intermediate zone for a continuous period of at least six consecutive months. This period can begin or end in the current year.
Use Form T2222, Northern Residents Deductions, to calculate the northern residents deductions that you can claim.
The deductions are claimed on line 255 of your tax return.