# First Time Filing Taxes as Common Law: -ve impacts vs +ve benefits?



## AV7 (Mar 16, 2017)

My common-law and I found ourselves in a very similar situation as a post from Congo below.

Me: 80k with shared custody of a child
Her: 21k with part-time school and part-time work

1. It appears that she will no longer receive her GST/HST cheques because these are calculated base on household income as oppose to individual income. Is that correct?

2. It appears that my CCB will be reduced or eliminated, again because those are calculated base on household income. Is that correct?

3. I receive and use the CCB cheques, why do they have to be claimed on her taxes?

4. It appears that I was able to claim the childcare expenses on my taxes ONLY because she's at school part-time, but next year, she won't be... so the 2-3k of childcare expenses will have to be claimed on her taxes even though I am the one paying them in full?

5. Other than these 4 negative impacts, are there any positive benefits of having started claiming as Common-Law (from single)?

Any feedback on these 5 questions will be extremely helpful and appreciated.

Thanks


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## jerryhung (Mar 28, 2011)

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/prsnl-nf/mrtl-eng.html


> Common-law partner
> This applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:
> 
> has been living with you in a conjugal relationship, and this current relationship has lasted at least 12 continuous months;
> ...


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## AV7 (Mar 16, 2017)

Hey Jerry, thank you for the CRA extract. Unfortunately it does not answer any of my 5 questions I posted. I know what are the conditions of a common-law status. I am not trying to avoid filling my taxes under that status (my taxes are already filled anyway). My post is asking if the 4 negative impacts I have identified are indeed correct and if anyone knows any positive benefits (question 5).


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## AltaRed (Jun 8, 2009)

1. That is correct.
2. That is correct.
3 & 4 - Generally yes IF the child is hers (or yours together). But I am sensing the child is actually yours from a previous relationship. I think there has to be an exception for that (google for CRA information on that) because if the child is yours from a previous relationship and she has not formally adopted it, she has no 'ties' to the child.
5. You don't have a choice in the matter. If you have been co-habitating for 12 months, you have to file as a common law (equivalent to married) relationship. There are certain tax benefits that can be beneficial for a common law relationship if your partner is below the threshold of 'spousal deduction', etc., transferring of 100% (or none) of eligible dividend income, etc. but they are relatively small. Doesn't seem to be in your case.


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## AV7 (Mar 16, 2017)

1. Sad

2. Very sad

3 & 4. I called CRA and I was informed that regardless if my present common-law has no ties to my child from my previous relationship of which I have shared custody, there are no exceptions! Seriously? I will (maybe) receive and use the CCB cheques and I will pay in full the daycare expenses but yet both will be claimed on her taxes, again seriously??

5. I know there are no choices to be taken, we are common-law and we have already filled as so. I am still searching for a BENEFIT (that applies to individuals in similar conditions as mine), I've read a lot on it since and still haven't found anything! I therefore challenge YOU the reader to find one 

Conditions:

Common-Law #1: ~80k with shared custody of a child from a previous relationship.
Common-Law #2: ~20k with part-time school and part-time work (No child).


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## Eclectic12 (Oct 20, 2010)

The potential benefits include:

a) transferring non-refundable credits that can't be used over the other spouse (examples of eligible ones include the age amount, the pension income amount, the disability amount and tuition and education expenses).

b) there is a non-refundable credit if one supported the spouse for some/all of the year

c) some non refundable credits can be added to a pool then the pool deducted from the higher earning spouse's tax return (ex. medical expenses, charitable donations, public transit).


Here's an article that may help ... http://www.theglobeandmail.com/glob...not-have-told-you-about-taxes/article4263750/


Cheers


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## AltaRed (Jun 8, 2009)

b) only works for low income spouses. Per tax tips:


> If, at any time in the year, you supported your spouse or common-law partner and his or her net income (line 236) was less than $11,474 for 2016 ($11,635 for 2017), you can claim all or a portion of the spousal amount of $11,474 for 2016 ($11,635 for 2017). See the tables of non-refundable tax credits for the provincial amounts and tax rates of this tax credit, which also show the spousal amounts for each province and territory. The amount is reduced by any net income of the spouse.
> 
> The spousal amount
> 
> ...


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## AV7 (Mar 16, 2017)

Thanks Eclectic12 and AltaRed. I will read the article linked asap. Unfortunately, I don't expect that WE will be eligible for the benefits you mentioned  But it may be usefull for others reading this.


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## LXG (Feb 16, 2017)

Isn't claiming the CCB on her taxes a benefit, since she is a lower earner?

I hear you on CRA and its weird, unfair rules. I can't claim my kids on my taxes, even though we share them 50/50, because I pay child support and my ex does not. Grrr!


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## AV7 (Mar 16, 2017)

LXG: please note that I am an Ontario resident and it what I will write could be different for one living in Calgary.

With single status, the CCB amount you receive is based on your income, the more income you make the less CCB you'll receive. With a common-law status, the CCB amount you received is based on your household/common-law income, which will be equal or greater than as it would be with a single status. More likely, your household income will be greater, then you will receive less CCB, hence the negative impact of having switching from single to common-law status.

As for your second point, I will give you my understanding... I may be wrong and if I am, I invite anyone to correct me.
TIP #1: CRA states that you cannot claim your child on your taxes *IF* you pay support to the person you are sharing custody with. *BUT* the type of support that is implied in this statement is spousal support and *NOT* child support. 
TIP #2: In the event that I am wrong in TIP #1, CRA has a no-sense differentiation how on child support is being paid. If the court order state that *ONE PARENT* is to pay to the *OTHER PARENT* child support base on the differences in their income and in accordance with the Department of Justice tables, then you can claim your child on your taxes (as long as both parent agrees on who will be claiming their child on their taxes, if the parents disagree, neither parent can claim their child). I read somewhere that if the court order state that *YOU* are to pay child support to the *OTHER* parent, then you cannot claim your child on your taxes. You notice the difference in the wording between *blue* and *green*? It's stupid eh? Well regardless, TIP #1 take precedence, so ignore TIP #2.
TIP #3: you may want to call CRA and precisely explain your case and hear what they say. Then come back here and let me know


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## LXG (Feb 16, 2017)

I gotcha. I thought you meant that she was claiming the CCB as income on her taxes.

The CRA site is pretty clear that it means child support, and in my case my ex has $0 income for the purposes of calculating child support, so I'm hooped for now. To add salt to the wound, both my kids are eligible for the disability tax credit, and I am also not getting to claim that. I did check with an accountant, who confirmed this but feels that the CRA's rule is inequitable (which I obviously agree with). 

Isn't tax time fun!?


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## AV7 (Mar 16, 2017)

LXG said:


> I gotcha. I thought you meant that she was claiming the CCB as income on her taxes.
> 
> The CRA site is pretty clear that it means child support, and in my case my ex has $0 income for the purposes of calculating child support, so I'm hooped for now. To add salt to the wound, both my kids are eligible for the disability tax credit, and I am also not getting to claim that. I did check with an accountant, who confirmed this but feels that the CRA's rule is inequitable (which I obviously agree with).


The income received from the CCB cheques is being claimed on her taxes as she has the lower income. TurboTax does it automatically.

Oh, I will have to check the CRA wording when I have time. So I guess my TIP #1 is wrong then...

Regardless of her income being $0 (for now), if you have a court order that explicitly orders the *blue* part below as oppose to the *green*, then you should be good to claim a child. Especially if you have 2 children... each parent should claim one child.

TIP #2: In the event that I am wrong in TIP #1, CRA has a no-sense differentiation how on child support is being paid. If the court order state that *ONE PARENT* is to pay to the *OTHER PARENT* child support base on the differences in their income and in accordance with the Department of Justice tables, then you can claim your child on your taxes (as long as both parent agrees on who will be claiming their child on their taxes, if the parents disagree, neither parent can claim their child). I read somewhere that if the court order state that *YOU* are to pay child support to the *OTHER* parent, then you cannot claim your child on your taxes. You notice the difference in the wording between *blue* and *green*?


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## LXG (Feb 16, 2017)

Well, the settlement agreement says that based on our guideline incomes, I am to pay him child support, and that the child support is based on the difference between our child support amounts (his child support amount currently being $0). I suppose we could split the kids 1 each and see what CRA does.


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## AV7 (Mar 16, 2017)

LXG said:


> Well, the settlement agreement says that based on our guideline incomes, I am to pay him child support, and that the child support is based on the difference between our child support amounts (his child support amount currently being $0). I suppose we could split the kids 1 each and see what CRA does.


YES, I would definitely go that road if I was you.

I guess there are no +ve benefits since no one has come fwd with any


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## OnlyMyOpinion (Sep 1, 2013)

AV7 said:


> ... I guess there are no +ve benefits since no one has come fwd with any


Does not sleeping alone count?:dejection:


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## AV7 (Mar 16, 2017)

OnlyMyOpinion said:


> Does not sleeping alone count?:dejection:


Clever reply! No it doesn't count as the benefits sought are strictly related to income taxes.


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