Tax Implications of Marrying a U.S. Citizen

Marrying an American citizen not only necessitates navigating through a range of immigration requirements, but also affects your taxes. If you marry a U.S. Citizen, it’s important to know what the Canada Revenue Agency expects and how the agency sees you and your spouse from a tax code perspective.

After your wedding, notify the CRA of your change in status in one of two ways:

• You may use the “Change my marital status” service on My Account, the CRA’s online web portal.
• You may fill out form RC65, Marital Status Change, and mail to your nearest tax center.

You need to include the date of your wedding and the names and social insurance numbers (if applicable) of you and your spouse.

If you receive benefits, your eligibility may change if you get married.

For example, if you receive the Canada Child Benefit, your spouse’s income may boost your family’s net income past the threshold. Additionally, the CRA may change the recipient of this benefit. In most cases, the CRA awards this benefit to the female parent in the house, regardless of whether the children are biologically hers.

The CRA does not offer the Canada Child Benefit to non-residents, unless they are married to a resident. This means your new American spouse may qualify for these benefits regardless of their residency status.

Other benefits that may change include the working income tax benefit and the GST/HST credit.

If you fail to report your change in marital status and the CRA later determines that you received benefits for which you were not eligible, you may be required to repay those benefits. Additionally, the CRA may charge you interest and penalties.

If you live in the United States and file an American tax return, you and your spouse may file jointly or separately, depending on whichever option gives you the larger advantage.

However, in Canada, you may not choose between the two. Instead, you must provide information about your spouse on your own tax return, which you must file separately.

Be prepared to declare your marital status and your spouse’s income.

• If your spouse is earning American dollars, you need to convert their earnings into Canadian dollars.
• If your spouse does not work, you may claim the deduction amount on line 303 for an eligible spouse. You may claim that amount even if your spouse is not a resident of Canada.

The CRA bases its tax obligations on your residency status, and if you and your spouse plan to live in the United States, you may no longer be considered a resident of Canada.

The Canada Revenue Agency determines residency on a case by case basis and examines a number of factors. Don’t assume your tax obligations are over based purely on relocation. To ensure you’re meeting all of your filing requirements, contact CRA directly for guidance based on your individual situation.