Just married or recently divorced? Here’s some tax information you need to know

When your marital status changes, the CRA will recalculate your benefits and credits based on your updated family net income, the number of children you have in your care, their ages and the province or territory you live in. Your benefit payments will be adjusted the month after your marital status changes.

When it comes to common-law couples, the CRA considers a couple to be common-law for tax purposes if they've lived together for 12 consecutive months in a conjugal relationship or if they share a child by birth or adoption and live together. Not advising the CRA you're living common-law and instead filing as a single individual is technically falsifying records “and could be considered tax evasion in some cases,” Ms. Ricchio cautions.

Marriage and taxes

When you get married, benefits such as GST/HST credits and the Canada Child Benefit will be recalculated since they're evaluated based on individual or collective income.

“When you marry, if your spouse earns significantly more than you, your benefits may decrease – or you may no longer qualify,” Ms. Ricchio says.

On the bright side, marriage also opens opportunities for tax efficiency and financial planning as a couple. You can transfer certain tax credits to your spouse, such as charitable donations, medical expenses or tuition credits, to help reduce their tax bill. Potential room for RRSP contributions is also affected, as spousal RRSPs allow the higher-earning spouse to contribute on behalf of the other, which helps balance tax savings in retirement.

If you or your spouse receives eligible pension income, you may be able to split it for tax advantages. Ms. Ricchio says investment income and capital gains can also be split between partners. The general rule for splitting capital gains between partners is that you declare your capital gain based on the proportion of your investment at the time you made it.

Separation and divorce

Ending a marriage or common-law relationship also has tax implications. Spousal support payments are tax-deductible for the payer and taxable for the recipient, while child-support payments are not taxable or deductible, Ms. Ricchio says.

“Always keep proper documentation of payments, as the CRA may ask to see court orders or a written separation agreement for deductions to apply,” she adds.

If you separate due to a relationship breakdown, wait until 90 consecutive days have passed before notifying the CRA. “After that, you're considered separated for tax purposes and you can update your status to reflect that,” Ms. Ricchio says.

If you separate or divorce, your relationship status will change from married or common-law back to single. If your spouse or common-law partner passes away, your status changes to widowed. If you remarry or enter a new common-law relationship, you must again update your status to reflect that.

If a couple chooses to separate, the rules about who qualifies as a dependant may change.

“If you were claiming a dependant on your taxes before the separation, you may be unable to claim that dependant now,” Ms. Ricchio says, noting there are several differences between claiming a spouse and now claiming other dependants you should know.

If you and your spouse separate, one or both of you may be able to claim a credit for qualifying dependants. If at any time during the year you did not have a spouse or common-law partner and supported and lived with a minor child or grandchild, or another relative such as an elderly parent, you may qualify for the amount for an eligible dependant. Formerly known as the “equivalent to married” amount, this may be a new credit for you, she says, as taxpayers who have spouses do not qualify.

“Each spouse may be able to claim the eligible dependant credit, depending upon the situation,” Ms. Ricchio points out. For example, if you're living with and supporting your elderly mother and meet the qualifications, you may claim the credit for her. If your former spouse lives with and supports your child, he or she may claim the amount for an eligible dependant.

While CRA rules apply to federal taxes, Ms. Ricchio says provincial definitions of common-law relationships may vary, particularly for family law matters such as spousal support or property division in the event of a breakdown of a relationship or death. She recommends checking with the CRA and local provincial regulations based on your circumstances.

Individual returns, even for couples

She also notes that Canadian tax rules don't allow spouses or common-law couples to file joint income tax returns. “Canadians file their own tax returns and indicate their marital status and the name and income of their significant other on it,” Ms. Ricchio says.

A coupled return means that each spouse files an individual return, but these are prepared together to ensure that credits and deductions are optimized, where possible, and household income is correctly reported for the determination of any additional benefits, she adds.

“If you can split or combine any credits, a coupled return is your best bet to ensure you have optimized all the benefits available,” Ms. Ricchio says.

Ms. Ricchio says tax solutions such as TurboTax can help Canadians get the best tax outcome, no matter their relationship situation. Taxpayers can get unlimited expert help and guidance as they prepare their return with TurboTax Assist & Review. Ms. Ricchio says TurboTax experts will then conduct a final review of your return before you file it and provide expert help afterward, “so you can feel confident your taxes are done right.”

This article was originally published by The Globe and Mail in March 2025.