Tax FAQs for Canadian NewlywedsBrian Jang ON October 10, 2019
Congratulations on your recent—or impending—marriage!
Among all the various changes taking place in your life, and learning about building a life together, you will probably find yourself wondering at some point how marriage will change your taxes. In order to help you out (since you probably already have a lot on your plate) allow us to present some of the most commonly asked questions about taxes and marriage in Canada.
Does the Date of Our Wedding Impact Our Taxes?
The date of your wedding has no effect on your taxes. No matter which date you choose for your wedding, when it comes to your taxes you will be considered to have been married for the entire year. This means that you may get married on January 1st or December 31st without any difference. That said, you do need to inform the Canada Revenue Agency (CRA) of your new marital status no later than the end of the month following the month in which you were married.
How do you do that? You have a couple of options:
- Go to the CRA site and under My Account, use “Change my Marital Status
- On the MyCRA app, select Marital status to make the change
- By phone at 1-800-387-1193
- Send Form RC65 Marital Status Change directly to the CRA
Do We Only File “Joint” Returns?
No, you do not. In fact, there is no joint return in Canada; each of you will still file your own tax return, although some information carries over from one spouse’s return to the other’s.
In Canada, we have what is known as a “coupled” return. This only refers to the preparation of the returns, which are prepared at the same time using tax preparation software that can detect and calculate certain amounts simultaneously on each return. This will calculate certain credits for each of you and is particularly helpful when it comes to tuition and disability amount transfers.
Can I File as a Single Person to Make Things Easier?
No, you will never file as a single again, and in fact, if you are married (even Common Law) and do not inform the CRA, you may face some serious consequences. The reason for this is that once you are married, you and your spouse combine your income to determine whether you are eligible for certain benefits. The GST/ HST credit is one example.
If you have received this credit in the past, for example, your combined income may bring you above the income cap. Fortunately, you are able to transfer some credits to your spouse (provided you don’t use them first). You may also be able to pool other credits, such as donations or medical expenses.
Are We Able to Transfer Unused Tuition Credits?
If your spouse is able to reduce their federal tax to “0” without claiming all of certain non-refundable tax credits, you may be able to transfer any unused amounts to your return if applicable:
- The Age Amount if your spouse/ common law partner was aged 65 or older
- The pension income amount
- The disability amount for self
- The Tuition amount for 2018 that your spouse/ common-law partner designates to you (maximum $5,000) minus the amount that they use, even if there is still an unused amount
- The Canada Caregiver amount for infirm children under the age of 18
Your spouse is unable to transfer any tuition, textbook, or education amounts carried forward from previous years. Further, your spouse or partner cannot transfer unused amounts to you if you were separated for 90 days or more.
Can I claim Credits for Stepchildren?
Yes. Most credits that relate to children may be claimed by a parent or stepparent. In certain cases, such as with childcare expenses, if the stepparents are the lower-income earners, they may have to claim the deduction.
Can We Claim Wedding Expenses?
Sadly, no. Even if you are using the wedding to simultaneously promote your own business, you will not be able to claim wedding expenses.
Getting married is the start of a great adventure together. Now that your two lives are intertwined, so are your taxes, but that doesn’t mean things need to become more difficult or confusing. In fact, just like in other parts of your lives, your marriage can benefit your taxes.
If you are newlyweds and need help with your taxes, contact BCJ Group today!