# Spousal tax credits



## Khlark (Nov 4, 2012)

I've tried to do a search on this item but haven't had much luck. I'm hoping one you might be able to help answer a question about non-refundable spousal tax credits.

I would like some clarification on the 'non-refundable' aspect of this tax credit. The info I've found on this tax credit seems to imply that unless I have taxes owing when I file then I can't claim the spousal tax credit. Is this correct? As my employer deducts from the source and I contribute to RRSPs, I am guaranteed a refund at tax time. So does this mean I automatically don't qualify for this tax credit? It seems strange to me...

A little background information..
My income: $85 K taxable, income taxes deducted from the source and $15 K in RRSP contributions this year.
Spouse: $5 K taxable income, $35 K non-taxable doctoral scholarships (not reported on line 236)

As the spousal tax credit is based on the reported income on line 236, and my wife has income under $10.5 K on this line, I should technically qualify. 

Question 2... I believe the spousal tax credit is only at the federal level. Does anyone know how it works for the province of Quebec? I recently moved from Ontario. 

Thank you!


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## stardancer (Apr 26, 2009)

If you are married and your spouse has income below the exemption level, you should be claiming the spousal credit on schedule 1. You are entitled to claim it, whether it does you any good or not.

'Non-refundable' just means that you don't get any actual cash based on that credit (as all credits on schedule 1). Instead the total of the credits times 15% is applied directly against your tax owing. Example:

You owe 5000 based on your taxable income; your credits are 1900; 5000-1900 = 3100; so you actually owe 3100, but you have paid 4000 through your paycheque. Your refund would be 900. If you don't claim all the credits you are eligible for on schedule 1, then your non-refundable credits will not bring your tax owing down as much.

Non-refundable example: you end up owing 1000; your credits are 1900; 1000-1900 = -900; you will not get a refund of 900 as the credits bring your tax owing down to 0. You may then get a refund because you have paid 4000 through your pay cheque- a refund of tax you have prepaid.

Each province also has its spousal credit. I don't know the PQ tax return, so I can't speak to that. You will have to take a look at a PQ tax return.


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## Khlark (Nov 4, 2012)

stardancer said:


> If you are married and your spouse has income below the exemption level, you should be claiming the spousal credit on schedule 1. You are entitled to claim it, whether it does you any good or not.
> 
> 'Non-refundable' just means that you don't get any actual cash based on that credit (as all credits on schedule 1). Instead the total of the credits times 15% is applied directly against your tax owing. Example:
> 
> ...


Thank you so much for your help! That makes a lot more sense..


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## smihaila (Apr 6, 2009)

There aren't second thoughts about it - just claim the spousal amount (and any other child-related credits if you have kids). While the Quebec's provincial tax return won't bring the tax owed considerably lower via the spousal credit it will be significant on the federal return.

Now, I'm not sure about those doctoral scholarship payments, but without them your spouse's income is pretty low without them, so the spousal credit will be beneficial.

Btw, did you move from Ontario to QC this year? You should have postponed the move until the beginning of the next year, if that was an option. QC taxman will rip you off like crazy.
In my case, I did just the opposite (QC->ON).


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## Khlark (Nov 4, 2012)

smihaila said:


> There aren't second thoughts about it - just claim the spousal amount (and any other child-related credits if you have kids). While the Quebec's provincial tax return won't bring the tax owed considerably lower via the spousal credit it will be significant on the federal return.
> 
> Now, I'm not sure about those doctoral scholarship payments, but without them your spouse's income is pretty low without them, so the spousal credit will be beneficial.
> 
> ...



Great tip on delaying the move, unfortunately it wasn't a possibility as the move was work related. I wanted to delay the official paperwork associated with the move until the new year, but there were too many items that forced me to complete it this year. And yes, the QC taxman will be ripping me off nicely this year (RRSP contributions should completely offset).


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