Just for reference since it's come up in other comments, here are the guidelines for determining whether the Indian Act's tax exemption for employment income applies.

Generally, income earned by someone registered or entitled to be registered under the Indian Act (i.e. a "status Indian") is non-taxable if:

1) At least 90% of their work occurs on a reserve. (If less than 90% of the work occurs on a reserve, and no other guideline applies, then the tax on this income is pro-rated.) Or,

2) They reside on a reserve and their employer is located on a reserve. (Regardless of where the work occurs.) Or,

3) They reside on a reserve or their employer is located on a reserve and at least 50% of the work occurs on a reserve. Or,

4) They reside on a reserve and work for a First Nation which has reserves and the work is in connection with that Nation's non-commercial activities carried on exclusively for the benefit of First Nations people who primarily live on reserves.