Spousal Tax Credit:(Non-Refundable Tax Credits-Continued)

Spousal Tax Credit:

Another very important tax credit for supporting your spouse is spousal tax credit. This credit can be claimed either by married or common-law partners. The taxpayer can file his tax return as married if on the last day of the year your marital status is “married”. The taxpayer can file his tax returns as common-law in case if he lives with his partner together for a continuous period of 12 months which includes December 31. Hence, if the taxpayer is living with his partner from say February 2015, he would not be regarded as common-law since at the end of the year 2015, he would not have completed 12 months of staying together.

For the year 2015, spousal Tax credit is calculated by the following formula:

      $11,327-Net Income of the Spouse

The net income refers to Line 236 of the Income Tax and Benefit Return for the year.

In case if the taxpayer is married during the year then this credit is calculated by considering the income of the spouse for the full year and not the income after the date of marriage.

In the year of separation for a married couple, the tax return will be filed as separate if there is a physical separation as on the last day of the year. The spousal tax credit in such a case is calculated by considering the income of the spouse up to the date of separation.

In case of common-law partners’ separation, they are regarded as separate only when they are separate for at least 90 days which includes December 31.

Another issue is with regard to getting this tax break when the spouse is a non-resident of Canada and has never entered Canada. In such a case this tax credit is calculated by the same above mentioned formula. However, there is one additional condition to be satisfied and that is that the taxpayer must have sent the money as a measure of support and the same should be enough as per the other country’s standard of living.