Filing Your Return -> Personal Income Tax -> Income Splitting -> Filing Tax Returns When You Have a Spouse
Filing Tax Returns When You Have a Spouse / Marital Status
Spousal tax returns are always filed separately - that is, the tax returns are prepared separately. However, when tax returns are prepared using personal income tax return software, most software will give the option of "coupling" the preparation of both returns. The returns are still printed and filed separately, but the software will usually highlight ways in which taxes may be reduced, and will automatically apply the spousal amount tax credit if eligible.
You are required to report what your marital status was as of December 31st of the tax year. This is done by ticking the appropriate box on page 1 of the tax return. The boxes include:
You are married or living common-law as long as you and your spouse are not living separate and apart from each other on December 31st because of a breakdown of the marriage or common-law relationship. If you are living apart from each other due to some other reason, including your spouse living in another country, you would still be considered married or living common-law.
See the Canada Revenue Agency (CRA) information on Marital Status, and When to Update Your Marital Status (link at bottom). In general, a marital status change should be conveyed to CRA by the end of the month in which your status changed, unless it is a separation - report after being separated for more than 90 consecutive days. Once you have been separated for 90 days because of a breakdown in the relationship, the effective date of your separated status is the date you started living separate and apart. So, if you separated prior to December 31, 2018 and were separated for 90 consecutive days, the status on your tax return for 2018 would be "separated".
You must report the name, social insurance number and net income (or the amount the net income would be if he/she filed a return) of your spouse or common-law partner on page 1 of your tax return. The spouse net income affects some tax credits, including the spousal amount tax credit.
The combined income of you and your spouse or common-law partner is used to calculate:- GST/HST credit
- Canada child benefit (CCB)
- Guaranteed Income Supplement (GIS)
- provincial low income tax reductions and some tax credits - see the information for your province
If one spouse is unemployed or has very low earnings, the other spouse can claim a spousal tax credit. See the tables of non-refundable personal tax credits for the federal and provincial territorial amounts of the spousal tax credit.
There are some tax credit amounts which can be combined and claimed on either spouse's return:
Some tax credits can be claimed by either spouse, or apportioned between spouses:
- Canada caregiver credit - 2017 and later years
- line 31300 (line 313 prior to 2019) Adoption expenses - on Canada Revenue Agency (CRA) website
Amounts no longer available that could be claimed by either spouse, or apportioned between them:
- line 364 Public transit amount - eliminated July 1, 2017 federally
- line 365 Children's fitness amount - not available 2017 and later years
- line 370 Children's arts amount - not available 2017 and later years
- line 314 Caregiver amount - 2016 and earlier years
- line 306 Amount for infirm dependants age 18 or older - replaced by line 30425 for 2017 and later years
- line 423 Family tax cut (FTC) - 2014/2015 only - could be claimed by either spouse, but not apportioned between spouses
The deduction (not tax credit) for child care expenses must generally be claimed on the tax return of the spouse with the lowest net income.
If one spouse (or common law partner) cannot use all of the following tax credits, they can be transferred to the other spouse by completing Schedule 2 of the tax return:- line 30100 (line 301 prior to 2019) Age amount
- line 32300 (line 323 prior to 2019) Tuition education and textbook amounts (these can also be transferred to a parent or grandparent
See also - links to all information on TaxTips.ca related to persons with disabilities.
When one spouse resides in a different province from the other, federal credits can still be transferred using Schedule 2 of the tax return. This is as long as the eligibility requirements are met. If you and your spouse were separated because of a breakdown in your relationship for a period of 90 days or more including December 31st of the taxation year, no unused amounts can be transferred from one spouse to another. See Line 32600 Amounts transferred from your spouse or common-law partner (line 326 prior to 2019) on the CRA website.
Provincial credits can also be transferred using the provincial schedule 2 of the spouse to whom the unused credits are being transferred. The calculation of any credits being transferred would be done using the forms of the province of the spouse to whom the unused credits are being transferred. There are exceptions to this for Prince Edward Island, Manitoba and Quebec.
Jane lives in BC, and would like to transfer unused age and disability amounts to her husband John, who lives in Alberta. John would claim the unused amounts by completing Alberta Schedule 2 and the Alberta provincial worksheet, as well as form AB428 for Jane as if Jane were a resident of Alberta.
You'll see that on the provincial Schedule 2 (for example, Alberta) it indicates "If at the end of the year your spouse or common-law partner was not a resident of Alberta, special rules may apply. For more information, contact the Canada Revenue Agency." If you are in doubt about how to do this, please contact a tax professional.
If one of you is residing in another province because of work, it's possible that you both could still be residents of the same province see our article For Which Province do I File a Tax Return?
When investments are held in a joint account, the investment income (including capital gains) should be reported based on the funds contributed to the account by each spouse. If the funds were provided equally by both spouses, then the investment income would be split equally. This subject is covered in the CRA web page Line 12100 - Interest and other investment income (line 121 prior to 2019), under the topic of Bank accounts.
In order for the lower income spouse to be able to claim more investment income, finances should be arranged so that the lower income spouse has money to invest.
Canada Revenue Agency (CRA) Resources
Tax Tip: Try to arrange your finances so that both spouses have equal income before and after retirement.
Revised: September 11, 2020
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