# Spouse Amount on Line 303 Schedule 5 during separation



## 8472 (Apr 21, 2016)

Hello. I'm hoping someone here can shed some light on something for me. I am helping a couple of now-divorced friends do their 2015 income tax. During 2015 they were married for the first 2 months and separated for the remainder of the year.

I've used both Studio Tax and UFile and they both automatically place the wife's line 236 (net income) into the husband's Schedule 5. I properly entered their marital situation and separation date into the programs. Apparently, he is allowed to do this because they were still married for a portion of the tax year. The problem I am having is with this info from the CRA website explaining how/why this is done:

"If you separated in 2015 because of a breakdown in your relationship and were not back together on December 31, 2015, reduce your claim only by your spouse's or common-law partner's net income before the separation. In all cases, enter in the "Information about your spouse or common-law partner" area on page 1 of your return the amount you use to calculate your claim, even if it is zero."

To me, this suggests that the appropriate amount to be used on the Schedule 5 isn't the full amount from her Line 236, but rather only the portion from when they weren't separated. In this case her Line 236 is about 6000$ and the portion when married about $1000. 

Am I reading this right and if so how does one claim only the "still together" amount? Or is Studio Tax and Ufile doing it correctly? I even tried it in the HR Block software which doesn't automatically claim the Spouse Amount, but when I tell it to do so it also claims the full 6000$.

Any help or advice or whatnot would be appreciated. I'd hate to claim it and later in the year he gets a bill for getting back too much. 

Thanks.


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## twa2w (Mar 5, 2016)

You are correct in your reading. Each party should only show the income for the other for the period they were together.
I am not familiar withe the doftware you are using, but I assume you are trying to do the two returns together and is is automatically cross referencing the incomes and you are not able to over ride?
What I might try is doing his return only on studio tax and do her return on ufile. This should allow you to input what you need.
Sorry, not much help beyond this.. Hopefully someone else is more familiar with the software you are using


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## 8472 (Apr 21, 2016)

TWA, Thanks for your reply.

I have been doing their returns separately. In the case of Ufile, it goes through the usual personal info like name and address then asks for marital status and change in marital status. It then takes me to a page looking for info on the ex-spouse. 

The CRA info is a bit convoluted in the wording. Only the portion while still married, but it doesn't ask for that. It asks for the claim to be reduced by the income amount while still married. Which suggests to me it might be looking for the base amount of 11,327$ less the 1000$ income while still married. Or 10,327$. 

Maybe. 

Thanks again for your reply.


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## OptsyEagle (Nov 29, 2009)

I have no idea what is the correct approach but if the right answer is to enter the income of the spouse ONLY for the time they were together, then would it not be correct that if you had two spouses, EACH earning $365,000 per year and separated on January 2nd, 2015, that BOTH would then be eligible for an extra $10,300 spousal tax credit (about $11,300 minus $1000 of income till Jan.2nd).

I really can't see CRA being quite that stupid, so what am I missing here?


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## OptsyEagle (Nov 29, 2009)

Ok, so from the replies it appears like I am not missing anything here.

The strategy then is therefore simple. If you and your spouse have a falling out. Get the separation agreement in place. Make sure you date it January 2nd. By doing so you get about $4,100 of tax savings from the tax payer and you can allocate that to go towards the legal fees. Doesn't really matter how much money you or your spouse makes, it seems that the tax payer is more then happy to contribute to anyone's broken marriage.


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