PERSONAL TAX TRAINING

MARITAL STATUS CHANGE AND CANADIAN TAX LAW

Your marital status plays an important role in Canadian income tax reporting. The status you select on your return must reflect your situation on the last day of the tax year (December 31). Changes such as marriage, entering a common-law relationship, separation, divorce, or the death of a spouse can directly affect your eligibility for tax credits and government benefits.

How the CRA Defines Marital Status

Spouse: A person to whom you are legally married.

Common-Law Partner: For tax purposes, a common-law partner is a person with whom you live in a conjugal relationship and one of the following applies:

• You have lived together continuously for at least 12 months.
• You share a child by birth or adoption.
• The person has custody and control of your child (or had custody before the child turned 19) and the child is financially dependent on that person.

A conjugal relationship generally involves emotional, financial, and social interdependence. In some situations, individuals may still be considered common-law partners even if they do not permanently reside at the same address, depending on the overall nature of the relationship.

Separation and the 90-Day Rule

For tax purposes, a separation is recognized only after you and your spouse or common-law partner have lived apart due to a breakdown in the relationship for at least 90 consecutive days. Until the 90-day period has passed, you are still considered married or common-law.

If you reconcile during the 90-day period, your status does not change. If reconciliation occurs after 90 days and you have already updated the CRA, you must notify the CRA again.

Information You Must Report About Your Spouse or Partner

When you are married or common-law, you must provide your spouse’s or partner’s information on your tax return, even if they did not file their own return. This includes:

• Full legal name
• Social Insurance Number (SIN)
• Net income from Line 23600 (or what it would be if they filed)
• Whether they were self-employed during the year

This information is required to properly calculate income-tested benefits such as:

• GST/HST credit
• Canada Child Benefit (CCB)
• Canada Carbon Rebate
• Guaranteed Income Supplement (GIS)

When You Must Notify the CRA

• You get married
• You become common-law
• You separate for more than 90 days
• You divorce
• Your spouse or partner passes away

You can update your status through CRA My Account or by submitting Form RC65 – Marital Status Change.

Tax Implications of Marital Status Changes

• Benefit recalculations: Many credits are based on combined family income.
• Spousal amount credit: You may claim a spousal amount if your partner’s income is below certain thresholds.
• Spousal support payments: May be deductible or taxable depending on the arrangement.
• Transfer of credits: Certain unused credits (e.g., tuition) may be transferable.

Important Compliance Notes

Failing to update your marital status can result in benefit overpayments or underpayments. Overpayments may need to be repaid. Always keep supporting documents such as marriage certificates, separation agreements, or court orders, even though they are not required at the time of reporting.

Summary

Your marital status affects how benefits are calculated, what information must be reported, and which credits you may claim. Ensure that your status reflects your situation as of December 31 and notify the CRA promptly when changes occur.