Life events can have an impact on your taxes
Did you know?
Whether you just got married or divorced, had a baby, or lost a loved one, life events can affect your tax affairs.
If your marital status changes, it’s important to let the Canada Revenue Agency (CRA) know as soon as possible.
- Change your marital status – You can change your marital status online by using the Change my marital status service through My Account, or by calling 1-800-387-1193, or send us a completed Form RC65, Marital Status Change.
- Change of name – If you changed your name, let us know as soon as possible. Call us at 1-800-959-8281 so we can update our records. We do not accept changes of name by email or over the Internet.
- Spouse or common-law partner amount – Did you make the majority of the household income this year? If at any time in the year you supported your spouse or common-law partner and his or her net income was less than $11,038, you can claim this amount! If you also claimed the family caregiver amount, your spouse or common-law partner’s net income must be less than $13,078 to be eligible.
- Contributing to your spouse’s or common-law partner’s RRSP – Contributions you make to a spousal or common-law partner RRSP reduce your RRSP deduction limit. Find out how much you can contribute and deduct!
- Authorize a representative – Is your spouse or common-law partner a tax whiz? You can authorize your spouse or common-law partner online, using My Account, as your representative for income tax matters.
- Change your marital status – If your marital status changes during the year and you are entitled to any Canada child tax benefit (CCTB) payments, GST/HST credit, or working income tax benefit (WITB) advance payments, you must let us know by the end of the month after the month of your divorce. In the case of separation, do not tell us until you have been separated for more than 90 consecutive days. You can change your marital status online using My Account, by sending us a completed Form RC65, Marital Status Change, or by calling 1-800-387-1193.
- Are you making or receiving support payments? For information about the tax implications, go to Support Payments.
Having a baby
If you have a new baby or have a baby on the way, there are plenty of credits and benefits you may be entitled to receive. Applying is easy:
- Automated Benefits Application – Save time and paperwork! When registering the birth of your newborn, you can also consent to use the Automated Benefits Application (ABA), which allows you to automatically apply for child tax benefits at the same time. If you give your consent on the provincial/territorial birth registration form, do not reapply for your child's benefits using the CRA online service or Form RC66, Canada Child Benefits Application.
- My Account – You can also apply to receive your Canada child and family benefits by using the Apply for child benefits service or by downloading and mailing Form RC66, Canada Child Benefits Application to your tax centre.
Explanations of these benefits are provided below.
- Canada child tax benefit (CCTB) – The CCTB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age.
- Universal child care benefit (UCCB) – If you have children under 6 years of age, you may be eligible to receive $100 per month per child. You should apply for this as soon as possible after the birth of your child. Under proposed changes effective January 1, 2015, parents will be eligible for a benefit of $160 per month for each eligible child under the age of six – up from $100 per month. In a year, parents will receive up to $1,920 per eligible child under the age of six, and $720 per child aged six to 17.
- GST/HST credit – Families with low or modest incomes can receive this tax-free quarterly payment to offset some of the GST/HST they pay. To receive this credit, you must file an income tax and benefit return every year, even if you have no income to declare. If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.
- Provincial and territorial programs – Most provinces and territories have child and family benefit and credit programs that are issued with your Canada child tax benefit and the goods and services tax/harmonized sales tax (GST/HST) credit. Check out your options.
- Working income tax benefit (WITB) – Low-income families that are in the workforce can claim this refundable tax credit to get personal tax relief. You can claim the WITB on line 453 of your tax return if you meet all the eligibility criteria.
- Disability amount – If you have a severe and prolonged impairment in physical or mental functions and meet certain conditions, you may be entitled to claim the disability amount. To determine if you may be eligible for the disability tax credit (DTC), you must complete Form T2201, Disability Tax Credit Certificate and have it certified by a qualified practitioner (medical doctor, optometrist, audiologist, etc.). When done, send the certified original form to the Disability Tax Credit Unit at your tax centre.
- Family Tax Cut – Under proposed changes, a non-refundable tax credit of up to $2,000 is available to eligible couples with children under the age of 18, and is effective starting with the 2014 tax year.
- Child disability benefit (CDB) - The CDB is a tax-free benefit for families who care for a child under age 18 who is eligible for the disability tax credit.
- Registered education savings plan (RESP) – You can start saving for your child’s future now. An RESP is a contract between you (the subscriber) and another individual or organization (the promoter) that allows you to make contributions toward your child’s future education. Programs such as the Canada education savings grant (CESG) and the Canada learning bond (CLB) are other great incentives to create an RESP for your child.
- Registered disability savings plan (RDSP) – A registered disability savings plan (RDSP) helps families save for the financial security of a person who is eligible for the disability tax credit. Although RDSP contributions are not tax deductible they can be made until the end of the year in which the beneficiary turns 59.
For more information on child and family benefits, go to www.cra.gc.ca/benefits.
Dealing with taxes after a death
Here are a few things to keep in mind when dealing with someone’s taxes after they have passed away.
- File a final return – A final return must always be filed after a death. The legal representative of the deceased must report all of the deceased’s income from January 1 of the year of death up to and including the date of death. Report income earned after the date of death on a T3 Trust Income Tax and Information Return. Also be sure to note the due date for the final return.
- Instalments - If an individual who has to pay tax by instalments dies during the year, instalment payments due on or after the date of death do not have to be paid.
- Consult the CRA’s Chart 1 - Returns for the year of death – This chart lists all types of income, deductions, and credits and tells you what type of return each can (or must) be reported or claimed on.
- Report the deceased’s income on optional returns – Claiming certain amounts more than once, splitting them between returns, or claiming them against specific kinds of income may reduce or eliminate some of the deceased’s taxes.
- Goods and services tax/harmonized sales tax (GST/HST) – Sometimes, the deceased will receive a GST/HST credit payment after the date of death because the CRA was not aware of the death. In this case, you should return the payment to the tax centre that serves your area and give us the date of death so we can update our records.
- Canada child tax benefit (CCTB) and Universal child care benefit (UCCB) – If a CCTB or UCCB recipient dies, contact us at 1-800-387-1193 and let us know the date of death. If the deceased’s spouse or common-law partner is the child’s parent, we will usually transfer the benefit payments to that person If anyone else, other than the parent, is now primarily responsible for the child, that person will have to apply for benefit payments for the child. If the deceased is an eligible child, your entitlement to CCTB and UCCB payments stops the month after the child's date of death.
- Deemed disposition of property – The tax treatment of capital property can be complex. Consult our website or call us at 1-800-959-8281 if you need more information.
CRA online services make filing easier and getting your refund faster
The CRA’s online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more. Did you know that the Government of Canada is switching to direct deposit for payments that it issues? This includes your tax refund and benefits payments. Sign up for direct deposit today! For more information, go to www.cra.gc.ca/getready.
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