Getting Together or Splitting Up?

No longer should you wait until you file your tax return to tell Canada Revenue Agency (CRA) that your marital status has changed. It is beneficial to inform them immediately after the change occurs.

First you must know when CRA considers your marital status to have changed:

• You have been co-habiting in a conjugal relationship for 12 months
• You are the parents of a child born of the relationship
• You get married
• You separate for more than 90 days (voluntary or involuntary)

Under these circumstances, CRA considers your marital status to have changed.

If any of these “events” have occurred, you must advise CRA as it will affect and possibly reduce your Child Tax Benefit and GST entitlements, effective the first of the month following the change.

As benefits are based on “family” vs “individual income”, the amount received will change with the alteration of an individuals marital status. Having said this, many people are finding that they must repay overpayments of GST and CTB received after the “event” because they overlooked immediately advising CRA of their change in marital status.

Similarly, in the event of relationship breakdown, GST & CTB benefits can increase as they are now based on “individual” income instead of “family” income after the breakdown of the relationship.

A Change in Marital Status Form (RC65) is available to clients and can be completed and filed on the client’s behalf. Prompt filing of this form typically avoids a situation where you are required to repay CTB or GST overpayments.

Disclaimer: Given the complexity of tax legislation and the general nature of the following information, no action should be undertaken without appropriate due diligence. Neither AccuTax Financial Services Inc. nor R.D. (Ron) Van Rooyen accepts any contractual, tortuous or other form of liability for the content of this information or any consequences arising from its use.

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