Filing tax returns when you have a spouse
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.
- Living Common-Law
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.
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.
- GST /HST credit
- Canada Child tax benefit (CCTB)
- Guaranteed Income Supplement (GIS)
- working income tax benefit
- refundable medical expenses supplement
- provincial low income tax reductions and some tax credits – see the information for your province
- BC Medical Services Plan (MSP) premium
Claiming tax credits and deductions with a spouse
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:
Medical Expenses – expenses for both spouses should be combined and claimed on the tax return of one spouse. It is often better to claim all medical expenses for both spouses on the return of the spouse with the lowest taxable income.
Donations for both spouses should be combined and claimed on the tax return of one spouse, because the tax credit for the first $200 of donations is at the lowest tax rate.
Some tax credits can be claimed by either spouse, or apportioned between spouses:
- line 306 amount for infirm dependent’s age 18 or older
- line 364 public transit amount
- line 365 children’s fitness amount
- line 370 children’s arts amount
- line 369 home buyers’ amount
- line 313 adoption expense
- line 314 caregiver amount
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.
- line 301 age amount
- line 367 amount for children under 18 (no longer available after 2014 taxation year)
- line 316 disability amount
- line 314 pension income amount
- line 323 tuition and education amounts these can be transferred to a parent or grandparent