Married & Filing Jointly In Canada

by Tax Guy - Burlington Accountant on March 21, 2011 Print This Post Print This Post

The income tax system in Canada requires that every individual file their own income tax return and report only their own income.

From time-to-time, I come across situations where a married couple has filed only one income tax return as a joint filing. This strategy is not something that is permitted under Canadian tax law and can end up costing you more tax money.

Read on to find out how spouses file taxes in Canada and why filing jointly can cost you!

What Does Filing Jointly Mean?

By epSos.de (cc 2.0) via FlickR

In the United States, married couples are permitted to combine their income and file a single income tax return. The US tax brackets and certain deductions are adjusted to reflect the fact that the couple may be reporting higher income. This is what is meant by filing jointly.

In Canada, a married and common law couples are required to report the income of their spouse as a disclosure on their income tax return. Our tax system provides some tax relief through tax credits for couples where one of the spouses has little or no income.

Married couples in Canada should not combine their income and file jointly.

Married Must File Separately

The tax system in Canada is based on individual incomes. There are tax rules to prevent married couples and families from shifting income between related groups. Similarly, there are no provisions to allow combined reporting for married couples.

Rather a married or common law couple is required to report the income from their spouses’ income tax return on the front of their own income tax return. The result is that each spouse only pays tax on their own income.

If You Have Combined Your Income

Combining income on a single tax return can be costly!

Consider the case of an Ontario couple who whose incomes are $25,000 and $18,000 respectively. By filing individual tax returns and reporting their spouses’ income properly, the tax on $25,000 would be $2,800 and on $18,000 the tax is $1,200 for a combined tax bill of $4,000.

If the couple combines their incomes on a single tax return, the tax bill increases to $6,600. By combining incomes on a single return, this couple pays $2,600 of extra income tax!

A Final Word On Disclosure

If you are married or are common law and are considering filing as single, think again. If you are married or common law you must report your spouse’s income and your marital status correctly on your tax return. Failing to do so can result in a reassessment and you may incur interest and penalties.

Looking For Professional Help?

If you’re looking for advice or tax planning services, you can contact me directly through my professional tax practice.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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{ 53 comments }

John March 21, 2011 at 6:34 pm

Hi,

I was doing my tax return using Turbo tax. when i put my spouses income in my tax return my refund went from 3200 to about 1900. is this normal, or did i do something wrong

Tax Guy March 21, 2011 at 9:59 pm

It’s quite normal. I have a post on it that will go out tomorrow at 10:00EST.

John March 23, 2011 at 8:47 pm

Can you explain this situation further?

Thanking you in advance. I really love this site!

David March 26, 2011 at 4:52 pm

I have just read the article and although it discusses why couples should/must file separately, it does not explain why the tax refund/payable changes when you disclose your spouses income.

Tax Guy March 26, 2011 at 5:30 pm

Does this article explain it for you? http://blog.taxresource.ca/disappearing-tax-software-refund/

David March 26, 2011 at 8:04 pm

Yes – that’s great! Thanks!

Ro February 17, 2012 at 12:39 pm

I got married in March 2011. Does that mean we declare each other’s income as of the date we married or for the entire year, including the months prior to our marriage?

Tax Guy February 17, 2012 at 1:20 pm

Yes.

From your spouse’s tax return, you report the amount on line 236 in the information box on your tax return. Your spouse reports the amount on Line 236 from your return in the information box on their return.

sonisha February 21, 2012 at 9:11 pm

hello,
i have an issue, im in a off and on relationship. My status is married and i have two children. However, i got audited about a year ago because they the CRA said i was filing single eventhough i was common law, eventhough my husband was living a separate life with another woman. We got back together and he had another child in which he left me when i was 6 months pregnant. my question, should i file my taxes as married or separated? its been over 7 months now.

Tax Guy February 22, 2012 at 6:19 am

Sonisha,
Take a look a t the definition of common law: http://blog.taxresource.ca/spouse-or-common-law-partner/

It should help.

AW February 29, 2012 at 3:05 pm

Hello, I’m in a situation where I just got married at the end of the year to a US citizen who resides and works in the US. Hence, do I leave the spousal information blank? (He has never had a SIN). Do I need to submit a statement or other documents for my spouse proving this? If so, do I have to manually file my return or can I still do it electronically (eg. TurboTax) and send in all the supporting documents separately?

Thanks so much for your time!

Tax Guy February 29, 2012 at 8:15 pm

AW,
You must put oyour spouses gross income on the information section of your return. I don’t know if TurboTax allows the electronic submision without a SIN.

Cassi March 21, 2012 at 5:32 pm

Hello Dean,

I have finished my tax return and want to file with StudioTax online but it wont let me as I do not have an income to report for my husband. He is self employed and takes a lot longer to do his taxes. It does not add him as a dependant, but does change the amount I would recieve for the CCTB. I used Telefile last year and was able to use unknown for his income. I am unable to use Telefile this year as I need to use the General tax forms instead of the Special tax forms they sent me. Can I enter the income amount from last year? I assume they would re-adjust the CCTB amount when they get his return. Would I be subject to an audit based on this discrepancy?

Tax Guy March 23, 2012 at 6:02 am

You have put an amount for him on your return. If your husband is self employed and does not need to file until June, you also have until June.

Linda Fernall March 25, 2012 at 2:39 pm

In August 2011 my common law spouse retired and in October 2011 he traveled to the USA to live there for 6 months. He is not due back until April 2012. THerefore, as of Dec 31, 2011 he was residing in the USA and we were not sharing a home. Should I file as single?

Tax Guy March 25, 2012 at 4:27 pm

Hi Linda,
You’re still common law until you are separated 90 days or more because of a breakdown in the relationship.

Sarah March 27, 2012 at 5:17 pm

Hi,
I got married this year. We’re in a long distance relationship and he has no current status or income in Canada. He also does not have an active SIN; he had a temporary one when he was a student here, but he left Canada in 2008. We don’t share expenses or income and all of his income is scholarship money.
So I’m really not sure how to file taxes this year. I use uFile, which I think requires a spousal SIN if married status is claimed, but I don’t know if his temporary SIN from 2008 is still valid. Also, does he have to file in Canada even though he hasn’t earned any money here and is not a resident?

Tax Guy March 27, 2012 at 6:49 pm

You don’t really need a SIN and so this is a software issue rather than a tax issue. You will have to paper file and write “none” in the SIN box for him and then report his gross worldwide income.

sonisha March 27, 2012 at 10:06 pm

If you file taxes as separated, what proof do you need to provide?

Wendy March 29, 2012 at 3:04 pm

Hi,
My partner and I have been living in 2 separate residences since June 2011. We are not technically separated, but would both like to tick the single box on our taxes. Our son lives with me and my partner lives in another city. We do not support each other, and our finances are separate. Is there any chance that the CRA would consider us to not be in a common law relationship?
Thanks for your help!

Tax Guy March 29, 2012 at 4:28 pm

I can’t answer your question because you haven’t said if you were married or common law. If you were common law and separated for 90 days or more due to a breakdown in the relationship, then you are single.

Wendy March 29, 2012 at 6:47 pm

We are common law and have been separated for more than 90 days but not because of a breakdown in the relationship. We live in separate residences because of work related issues. It seems as though I can claim my son as a dependent because my partner does not live with us or support us, however; I’m still not sure if this means that I can also claim single.
Again, your help is much appreciated.

Tax Guy March 29, 2012 at 8:48 pm

Wendy,
You are still common law and should report as such. If the do otherwise, you may be entitled to more G/HST credits but if the CRA finds out, you’ll have to pay it all back.

amber June 3, 2012 at 8:26 am

No matter what you do the canadian government will always find a way to scew people over. I have done nothing but filing my taxes correctly and in return the gov owes me over $110000, and after having to go to a the mayor of my town to help me fight there games I thought it was over. Nope, just redid my taxes, claimed commonlaw and there lovely reassesments are trying to say I owe them almost $3000. KISS MY ASS CANADIAN GOVERMENT. Stop playing games with people and taking whats rightfully thiers. Whether you do your taxes properly or not, unless you know all the tricks and games the government does play, you dont really realize how much they are screwing you! Everytime you get reassesed you should be bringing those to your accountant and get them to look at them. 9/10x the government is playing there games and they are screwing you over. Trust me!

SR June 20, 2012 at 8:26 pm

Hi, I’m in a really frustrating situation.
I got married mid-2010. My husband is self-employed. He has not filed his taxes to date. I have all of my documents ready, but I don’t see him doing his taxes in the near future. I have been asking him to the taxes for 2 years now. I wouldn’t know how to go through his documents either. He’s a great man with this one horrendous flaw. Am I stuck? I tried to do mine alone and was turned away because I don’t know details from his documents. I dont want to NOT do my taxes!

Tax Guy June 21, 2012 at 10:24 am

SR,

In your case, you can file your tax return manually and simply put your husbands SIN on the front page. For net income, put a question mark. Then attach a letter stating that your husband has not yet filed his return.

The CRA may withhold and refund due on your return until he files, but you have filed your return.

Many self-employed people get overwhelmed with their taxes. It seems like an insurmountable amount of work and they become concerned with the potential tax they may owe. If he is concerned with the tax bill or the amount of work, or any of it, he should either talk to his accountant to get it resolved or you can contact me directly and we can work something out for him – I have a free consultation to discuss how we can serve you.

I can tell you that if he brings the tax situation up-to-date, everything about his business should improve since he will be able to provide information to obtain lending and have data to manage the business.

carosse123 November 18, 2012 at 8:58 pm

Hi:

My ex-husband while we were married in 2008, is going to court for tax evasion sometime in 2013. He had done that behind my back. He had claimed a fictitious business loss. However, |I have no proof since he done this behind my back. Am I responsible as well. |I have a government job and security cleared. I would not want to lose my job for something I did not do. We are at the moment going through divorce proceedings.

Tax Guy - Burlington Accountant November 19, 2012 at 11:26 am

Unfortunately, I cannot comment on this situation due to liability issues. I would suggest you direct this to your own accountant or a tax lawyer.

Sima December 2, 2012 at 10:07 am

Hello
My husband has landed in Canada this year and he has worked on and off throughout the year. I know that this year we will have to file our tax return together but can I use a software to do that (I normally use Ufile) or must I have to file a paper tax return for him?

Tax Guy - Burlington Accountant December 2, 2012 at 11:55 am

You should be able to use software but you need to each file a return. You do NOT submit a single return.

AR February 7, 2013 at 4:35 am

How should I file my tax return, I’m separated since June 2012 (we are married). My daughter is living with me. as per the child benefit I already declare that I’m separated.

Jim February 10, 2013 at 8:35 pm

I have a question regarding filing as a common law couple, or more precisely, neglecting to do so. It occurred to me recently that my partner and I had hit the 12 month requirement of living together in a conjugal relationship a few years back – before he promptly left the country for school. While he was away, he was filing Canadian income tax with my address as his principle residence, I acted as his POA with the bank his student loan came from and we maintained the long-distance relationship without any hitches, but at no time were we relying on each other financially (we’ve never had a joint bank account). Fast-forward to today: we’ve recently resumed living together, will be getting married this November. Have we been misfiling our taxes? Note that few of the established indicia of a common-law relationship confirmed in MvH were present, largely because we weren’t living together. Should we file a Voluntary Disclosure asap?

Tax Guy - Burlington Accountant February 10, 2013 at 11:20 pm

I suppose you could argue that you were not in a relationship in the period your partner was away at school. For the remainder of the time, yes, you would be considered common law and you should file as such.

Whether a VDP is in order or not is difficult to determine in a forum such as this. If you were receiving the GST/HST credit or other credits, these may be lowered depending on your incomes and there may be some repayment required. If the amounts were small, I would just make the adjustment, move on, and forget the hassle of a VDP.

SN February 16, 2013 at 10:40 pm

i use studi tax software. i live and work and pay taxes in 1 province and my wife moved to another province before Dec 31,2012. the software won’t allow me to enter a different province for me than her’s. what do i do?

Tax Guy - Burlington Accountant February 17, 2013 at 10:06 am

SN,
It looks like this is a limitation of the software. You could prepare separate tax returns rather than couple the returns together.

Brian February 17, 2013 at 9:13 pm

Hi I’m married but my wife and I are living separate lives for the last year or so. Do I still have to file as married? I doubt if she will give me any of her personal information as we do not even talk.

Tax Guy - Burlington Accountant February 18, 2013 at 7:00 am

If you are legally separated then you may file as separated, if you are divorced, you file as divorced.

Tara February 19, 2013 at 4:31 am

I have been married since oct 2nd, 2010. My spouse refuses to disclose him income tax information to me. I know the first year he claimed single and this year he claimed that we are seperated. We have not been sepereated since marriage. What should I do?

Tax Guy - Burlington Accountant February 19, 2013 at 9:37 am

Tara,
You write as much as you can in the “Information About Your Spouse” section of the tax return and send it in. You may have to paper file it and attach a letter.

Miriam February 20, 2013 at 2:05 pm

Hi,
I got married this year in Manitoba. I am a student while my husband has a full time job. I worked over the summer to pay my tuition and usually as I student I would get all my income tax back. Now that I’m married but still going to school will I still get all my income tax back?
Your thoughts are appreciated

Tax Guy - Burlington Accountant February 20, 2013 at 3:00 pm

Hi Miriam,
Getting married will should not impact your tax refund.

Miriam February 26, 2013 at 7:54 pm

After filing my taxes I realized that I forgot my t4 from when I received grant money from the government. If I’m getting back $1000 how will this impact my return?

Tax Guy - Burlington Accountant February 26, 2013 at 9:56 pm

You’ll likely get reassessed in the summer and have to pay at least part of it back.

Tracey February 20, 2013 at 11:02 pm

My husband and I filed a 2012 tax return together but I did the tax returns seperately. As I am getting a tax return but he isn’t cause he was on worker’s comp and cpp disability. He had a house that went in default but I wasn’t on the title. He has received letters from cmhc and revenue canada saying if he gets a tax refund they will take it from him. My question is if I am entitled to a refund and he not then can they take my refund to make up what he owes. If he dies tomorrow and because we are common law will I be responsible for his debt.

Tax Guy - Burlington Accountant February 21, 2013 at 11:03 am

Tracey,
As a general rule, the CRA cannot collect from you unless you did something to prevent the creditor from collecting what was due to them.

You may want to open a bank account in your own name and start using it since creditors could seize joint assets.

ARM February 21, 2013 at 9:43 am

We got married in the Phillipines in 2000 and last June 2012 we started living separately. How should I file my tax? Can I declare that were separated? as of now he’s not giving any financial support.

Tax Guy - Burlington Accountant February 21, 2013 at 11:03 am

Assuming you are living apart due to a breakdown in the marriage, you would indicate separated.

ARM February 21, 2013 at 3:12 pm

Thank you for the reply 🙂

SOSHI February 24, 2013 at 2:17 am

Question here.
I’m working as nanny here and I’m try to do my tax.
My husband is with my only child back in our country. We are married. It’s more than a year since I’m here. My first Tax return was done by someone i’m trying to this on my own.

Question: Is my spouse an eligible spouse and is my child an eligible dependent even though they are not here with me?

Well, all my earning are going to them anyway. I hope to hear soon from you. Thanks.

Tax Guy - Burlington Accountant February 25, 2013 at 8:03 am

Hi Soshi,
You can claim these credits. However, if you claim the spouse amount then you cannot claim the eligible dependent. The vice verca.

If you want some help preparing and filing the tax return, I am more than happy to help. Feel free to contact me at 289-288-1206 or email me.

Jess February 25, 2013 at 1:44 pm

Hi, my husband and I were married November 2012, can we file separately, or do we have to do them together? He makes a lot more money then I do, and I’m worried we will have to pay more, but I wasn’t sure the legalities on this.

Tax Guy - Burlington Accountant February 25, 2013 at 8:10 pm

Hi Jess,
Everyone in Canada is required to file separate tax returns. There are no exceptions!

Alex February 27, 2013 at 8:30 pm

Hi there,

We live in Alberta, then we file together (we are married) is it cost me more money?

Thank you and regards

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