If you’re new to filing taxes in Canada, some of your key questions should be about which tax credits you can get. This is especially important if your spouse is a non-resident yet still a dependant.
Sound like you? If so, you might be thinking: Can I claim a non-resident spouse as a dependant in Canada? How do I claim the credit? What do all of these “resident” terms mean?
In this ultimate guide for beginners, you’ll learn all about spousal tax credits and how they apply to your individual situation.
- You can claim a spousal credit on your non-resident spouse as long as your marriage is in good standing.
- Your spousal tax credit is the difference between your personal credit and your spouse’s net income.
- You can qualify for an additional caregiver amount if your spouse is mentally or physically impaired.
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What is a spousal tax credit (and why does it matter)?
First order of business: knowing what spousal tax credits are and why they’re important.
The Canada Revenue Agency (CRA) allows you to take a spousal tax credit if you provide primary support for your spouse. This applies to you if you’re formally married or living with someone in a common-law situation.
You may claim the spousal tax credit if your partner makes less than your basic personal amount listed on line 30000 of your tax return. To calculate the credit, subtract your spouse’s net income from line 23600 from your personal credit.
You should also note that if your spouse is dependent on you because of a mental or physical impairment, you may be entitled to an additional $2,350 (as of the 2022 tax year).
Who can claim the spousal amount?
You can claim the spousal amount if you’re married legally or by common law, as long as your relationship is in good standing. What does that mean, exactly? For tax purposes, it means that the CRA considers married or common-law couples separated if they have been living apart for at least 90 days due to a breakdown in the relationship.
If your spouse is living elsewhere involuntarily—you’re only living apart due to circumstances beyond your control, such as work, school, or health—then you’re in the clear. In this instance, you’re still considered married in good standing and thus eligible to claim the spousal amount on your taxes if your partner’s income is low enough and you meet the other criteria as well.
Getting a handle on these tax credits is easier when you understand the terms used to determine eligibility. Here are the most important ones:
- Resident. Canada does not determine residency for tax purposes by citizenship. Instead, it’s based on the length of time an individual remains in (or outside) the country during a year and whether or not they have or plan to establish residential ties.
- Non-resident. A non-resident resides outside the country but may visit Canada frequently, staying for less than 183 days of the year, and does not intend to set up significant residential ties.
- Dependant. A dependant is a person who relies on you for financial support.
- Residential ties. Significant ties include where you live (regardless of whether you own or lease), where your vehicles are registered, where your driver’s license is issued, and where your spouse and children live.
Note that residents—whether determined factual or deemed—are taxed on worldwide income, while non-residents are taxed solely on Canadian income.
Common questions about spousal tax credits for non-residents
Looking for a TLDR? Here you go:
How to file taxes in Canada if your spouse lives in another country?
Before filing your taxes, you’ll need to determine your residency status. From there, you simply fill out the forms and supply any necessary documents to the CRA. If you’re claiming a spousal amount or a caregiver amount for a spouse, you’ll include Schedule 5 with your tax return.
Can I file taxes as a couple if my spouse is a non-resident?
No. You will file your tax return independently and indicate your marital status—legal or common-law—then provide information about your non-resident spouse. The details you provide about your spouse will determine which tax credits you qualify for.
Can I claim my non-resident spouse as a dependant in Canada?
Yes, if you meet the criteria. If you’re living separately for involuntary reasons—and not because the marriage is dissolving—and if your spouse earned less than your basic personal amount for the year, you can claim them as a dependant. If your spouse is also mentally or physically impaired, you may be eligible for additional spousal benefits.
What are the rules for claiming a dependant?
A dependant is someone who relies on you to provide them with their basic fundamental needs. This includes shelter, food, and clothing. You can claim a spouse as a dependant if they earn little to no income or are mentally or physically disabled.
Family relationships are intricate, of course; therefore, a dependant may be a child, grandchild, stepchild, niece, nephew, brother, sister, etc. These family members may be yours directly, or those of your spouse.
When to claim a spousal amount: 5 examples
To get a better understanding of claiming spousal credits—whether or not your spouse is a Canadian resident—here are some scenarios that could apply to you:
- Sole breadwinner in Canada. You work full time and provide housing, clothing, food, and other life necessities for your husband. He had zero income for the tax year. Your personal tax credit is $2,200. Since $2,200 minus zero is $2,200, your spousal amount tax credit is $2,200.
- Sole breadwinner outside of Canada. You are the sole breadwinner for your family. You work outside the country for the majority of the year but still pay all of the bills and supply funds to your spouse and children for everyday living. Your spouse does not work or earn an income. Despite your prolonged periods outside the country, you are still eligible to claim your spouse as a dependant and take the full tax credit.
- E-commerce sales. Your spouse occasionally sells things on eBay but made only $3,000 net for the entire year. Your personal amount is $4,200. Since your spouse made less than you, you’re allowed to subtract the earnings from your personal amount and take the difference as a credit. In this example, you’d qualify for a spousal tax credit of $1,200. This is what the math looks like: $4,200 – $3,000 = $1,200.
- Spouse attends school outside Canada. You live and work in Canada but your spouse lives in the U.S. to attend school. Your marriage is healthy and you’re living apart only because of life circumstances. Your spouse is a non-resident and earns no income of their own, so you provide for all of their support. This makes you eligible for claiming the spousal amount tax credit.
- A temporary separation. You and your common-law husband had a falling out in the middle of the year and chose to live separately. You remained separated for four months, then reconciled. You were living together again as a married couple on the last day of the year. Your husband earned less than your personal amount, thus you are allowed to claim the spousal amount credit, despite being separated for part of the year.
Keep in mind that these examples are illustrative only, as each person’s specific tax numbers and circumstances may differ.
Resources for claiming the non-resident spousal amount
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