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Reporting amounts transferred from spouse

Reporting amounts transferred from spouse

Pre-test question

Select True or False

An individual may be able to claim all or part of certain amounts that their spouse or common-law partner is eligible for but does not need to use towards reducing their own federal tax to zero.

  • True
  • False

Instructions

  1. Open the tax software
  2. Review the Background information and Required slips (tax slips, receipts, etc.)
  3. Provide all required information for the appropriate sections of the tax software
  4. Once completed, compare your results with the solution provided
  5. Afterwards, refer to the Takeaway points

Background information

Situation

Tim and Donna are married and preparing their tax returns. They both have working income.

Identification information

Identification information
Name Tim Ward
Social insurance number (SIN) 000 000 000
Address 123 Main Street
City, Province  X0X 0X0
Date of birth (DOB) August 8, 1956
Marital status Married to:
Donna Ward on June 7, 1986
SIN: 000 000 000
DOB: June 13, 1953

Required slips

T4 – Statement of Remuneration Paid (for Tim)

Text version of the above image

T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Torch Corp.
Employee’s name and address:
Last name: Ward
First name: Tim
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income: 38,123.00
Box 16: Employee’s CPP contributions – see over: 1,310.11
Box 18: Employee’s EI premiums: 600.00
Box 22: Income tax deducted: 3,566.12
Box 24: EI insurable earnings: 38,123.00
Box 26: CPP/QPP pensionable earnings: 38,123.00

T4 – Statement of Remuneration Paid (for Donna)

Text version of the above image

T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Heat Inc.
Employee’s name and address:
Last name: Ward
First name: Donna
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income: 7,500.00
Box 16: Employee’s CPP contributions – see over: 204.00
Box 18: Employee’s EI premiums: 115.00
Box 22: Income tax deducted: 700.00
Box 24: EI insurable earnings: 7,500.00
Box 26: CPP/QPP pensionable earnings: 7,500.00

Review your results

Solution to Reporting amounts transferred from spouse.

Takeaway points

Steps to follow

  1. Review their background information and required slips
  2. Click add spouse next to the Family Head (Tim Ward) tab
  3. In the Family Head (Tim Ward) profile, select Complete information (recommended) from the What information will you provide for your spouse? drop-down menu in the Spouse interview type section
  4. Complete the Interview with Tim before starting Donna’s Interview
  5. Click T4 and employment income in the left-side menu, then click the + sign next to T4 income (earned in any province except Quebec) and enter the required information
  6. The tax software automatically calculates and claims the spouse or common-law partner amount (30300) and amounts transferred from your spouse or common-law partner (32600) when applicable

The individual may be able to reduce their federal tax to zero by claiming all or part of certain amounts that their spouse or common-law partner qualifies for but does not need to use towards reducing their own federal tax to zero.

In this case, Donna was eligible for the Age amount on line 30100 of her tax return but had no federal tax to pay. Since this is an amount that may be transferred to a spouse or common-law partner, the tax software automatically transfers the unused portion to Tim on line 32600, Amounts transferred from your spouse or common-law partner to help reduce his federal tax.

For more information, refer to UFile instructions.

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