Anaya Nolan
The Canada Revenue Agency (CRA) considers a couple to be in a common-law relationship if they have lived together for 12 consecutive months or have children together. Other circumstances, such as sharing a biological or adopted child, can also trigger common-law status. It is important to disclose one's relationship status accurately when filing taxes, as it affects eligibility for specific government benefits and credits. Common-law couples are treated similarly to married couples by the CRA and Revenu Québec, and must file their tax returns accordingly.
| Characteristics | Values |
|---|---|
| Definition | The Government of Canada defines common-law marriage as living in a conjugal relationship with a person who is not your married spouse. |
| Duration of living together | At least 12 continuous months. However, this duration varies from province to province. For example, in Ontario, it is three years (or one year if you have children), but the threshold is only two years in British Columbia. |
| Parenthood | If you share a biological or adopted child with your partner, you are considered common-law partners for tax filing, regardless of the cohabitation duration. |
| Custody and support | If your partner has custody and control of your child (or previously held custody until the child reaches 19 years of age) and provides primary financial support, this can also establish common-law status for tax purposes. |
| Tax implications | Common-law couples are considered married for tax purposes. The CRA combines the family income of common-law couples to determine eligibility for benefits such as the GST/HST credit, the Canada Child Benefit, the eligible dependant credit, and the Guaranteed Income Supplement and Allowance. |
| Separation | If common-law partners separate for less than 90 days within a period of 12 consecutive months, they are still considered to be common-law. Only when they have been living apart for 90 days are they considered separated. |
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What You'll Learn
Common-law status
The Canada Revenue Agency (CRA) defines common-law marriage as living in a conjugal relationship with a person who is not your married spouse. This definition is outlined in the federal Income Tax Act. The CRA considers you married for tax purposes if you meet the definition of a common-law couple.
There are several conditions under which one can be considered a common-law partner. The first is that the person has been living with their partner in a conjugal relationship for at least 12 continuous months. The second is that the person is the parent of their partner's child by birth or adoption. The third is that the person has custody and control of their partner's child (or had custody and control immediately before the child turned 19 years old), and the child is wholly dependent on them for support. It is important to note that the definition of a common-law relationship varies from province to province. For example, in Ontario, it is considered a common-law relationship if a couple has lived together for three years or one year if they have children, while in British Columbia, the threshold is two years.
If an individual meets the definition of a common-law relationship, they must disclose their relationship status and information about their partner when filing their tax return. The CRA combines the family income of common-law couples to determine eligibility for benefits such as the GST/HST credit, the Canada Child Benefit, the eligible dependant credit, and the Guaranteed Income Supplement and Allowance. Common-law couples can take advantage of certain tax credits and benefits unavailable to singles, but they may also lose access to others. For instance, CCTB and CWB entitlements may change as eligibility for these benefits is based on the adjusted family net income, which can increase when an individual becomes part of a common-law partnership.
It is important to update the CRA about any changes in marital status by the end of the following month after the status change. This can be done through the CRA My Account online or by completing and mailing Form RC65, Change in Marital Status.
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Tax benefits and credits
The Canada Revenue Agency (CRA) treats common-law couples the same as married couples for tax purposes. Common-law couples have access to certain tax credits and benefits that can help lower their tax liability as a couple.
Spousal Tax Credit
If your partner's net income is less than your personal basic amount (BPA), you may be eligible for a spousal credit. The credit is calculated by subtracting your partner's income from your BPA and then multiplying it by 15%. For the 2024 tax year, the maximum BPA is $15,705.
Caregiver Credit
You may qualify for an additional credit if your partner "has an impairment in physical or mental functions," according to the CRA. This amount is typically added to the spousal credit.
Transfer Unused BPA
If you don't fully use your BPA, you can transfer the unused portion to your partner to help them lower their tax liability.
Combined Medical and Charitable Donations
When filing your tax returns, you can combine medical receipts and charitable donations to maximize your credits and pay less tax.
Income Splitting
You can reduce your overall tax burden by splitting income between spouses.
Combined Deductions and Credits
You can maximize your tax savings by combining or transferring credits like spousal amount, medical expenses, and charitable donations.
Canada Child Benefit (CCB)
If you have children, you can potentially increase your benefits based on combined income, especially if one spouse has low or no income.
Goods and Services Tax/Harmonized Sales Tax (GST/HST) Credit
The GST/HST credit is based on your adjusted family net income, which can increase when you marry or become part of a common-law partnership. While single filers earning $55,000 each could qualify for the credit, a couple with the same incomes may not.
Canada Child Tax Benefit (CCTB) and Canada Workers Benefit (CWB)
Similar to the GST/HST credit, eligibility for the CCTB and CWB is based on your adjusted family net income, which can increase when you marry or enter a common-law partnership.
It's important to note that while common-law partnerships offer access to these tax benefits, there are also considerations to keep in mind. The CRA combines your family income when determining your eligibility for specific government benefits, which may affect your eligibility for certain programs.
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Relationship duration
The Canada Revenue Agency (CRA) considers a couple to be in a common-law relationship if they have lived together for 12 months in a row or if they are the parents of a child by birth or adoption. The CRA combines the family income of common-law couples to determine eligibility for benefits such as the GST/HST credit, the Canada Child Benefit, the eligible dependant credit, and the Guaranteed Income Supplement and Allowance.
The definition of a common-law relationship varies from province to province. For example, in Ontario, it is three years (or one year if you have children), but the threshold is only two years in British Columbia. It is important to note that the CRA does not acknowledge separations for couples who are still living together. However, once a couple has been living apart for 90 days due to a breakdown in the relationship, they are considered separated by the CRA.
The CRA treats common-law couples similarly to married couples for tax purposes. This means that common-law couples have access to specific tax benefits, credits, and deductions that are not available to single individuals. However, there may be disadvantages to filing as common-law versus filing as a single person. For example, the combined family income may affect eligibility for certain benefits.
It is important to disclose your relationship status and information about your partner when filing your tax return. Failure to do so may result in reassessment, and you may be required to pay interest and penalties on unpaid taxes. Additionally, you may be denied CPP and other pension survivor benefits.
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Relationship breakdown
In the context of a relationship breakdown, it is important to understand how Revenue Canada defines common-law relationships, as this will impact the way your taxes are filed and the benefits you may be eligible for.
Firstly, according to Revenue Canada, a common-law relationship is defined as living in a conjugal relationship with someone who is not your married spouse. This definition includes at least one of the following conditions: living together for at least 12 continuous months, sharing a child by birth or adoption, or having custody and control of a child who is wholly dependent on one partner for support. It is worth noting that the definition of a common-law relationship may vary across different provinces in Canada.
Now, in the event of a relationship breakdown, the Canada Revenue Agency (CRA) considers you separated only after you have been living apart from your partner for more than 90 days due to the breakdown. Until this 90-day threshold is reached, you are still considered common-law, even if you are temporarily separated. Once the 90-day period has passed, you should update your relationship status with the CRA through your online account or by completing and submitting the appropriate form.
It is crucial to understand the tax implications of a common-law relationship breakdown. As a common-law couple, the CRA combines your family income to determine eligibility for certain benefits, such as the GST/HST credit, Canada Child Benefit, and the Guaranteed Income Supplement. When your relationship status changes, the CRA will recalculate your benefits based on your new adjusted family net income.
Additionally, unlike married couples, common-law partners generally do not have automatic rights to property and assets after a relationship ends. This means that the division of assets during a breakup may be handled differently, and support obligations may vary. However, the perk of a common-law separation is that it tends to be less legally complex compared to a divorce.
In summary, when dealing with a relationship breakdown, it is important to be mindful of the CRA's definition of a common-law relationship and the time frame required for separation. Updating your relationship status with the CRA is essential, and understanding the tax and benefit implications will help you navigate this transition effectively.
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Child custody
In Canada, child custody is determined by the courts, which focus on the best interests of the child. There are two main types of custody: sole custody and joint custody. In sole custody, one parent has the exclusive right to make decisions for the child, while in joint custody, both parents share responsibility for the child's upbringing and have a say in decisions affecting the child.
When determining child custody, judges consider a range of factors outlined in Section 24 of Ontario's Children's Law Reform Act and reinforced under the Divorce Act for federal cases. These factors include the parent-child relationship and bonding, each parent's mental, physical, and emotional health, the typical schedule of both parents and children, available support systems such as extended family, and sibling issues. The court may also consider the child's wishes, especially if the child is 12 years or older.
It's important to note that historical care or being the primary caregiver does not automatically guarantee child custody. The court will determine custody based on the best interests of the child and may grant sole or joint custody depending on what they believe is most suitable.
In cases where the parents live in different provinces, the jurisdictional rules of each province regarding child custody may vary. Some provinces, such as British Columbia, Alberta, and Manitoba, apply general common law rules, while others, like Ontario, have enacted specific legislation.
Additionally, when it comes to the Canada Child Benefit (CCB), the residency of the child plays a role in determining eligibility. If a child lives with an individual at least 40% of the time or on an approximately equal basis with another individual at a different address, it is considered shared custody for CCB purposes.
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Frequently asked questions
The Government of Canada defines common-law marriage as living in a conjugal relationship with a person who is not your married spouse. One of the following conditions must also apply: you have lived with your partner for at least 12 continuous months; you share a child by birth or adoption; or your partner has custody and control of your child and your child is wholly dependent on them for support.
Common-law couples are treated the same way as married couples by the Canada Revenue Agency (CRA) and Revenu Québec. This means shared access to specific tax benefits, credits, and deductions. However, the CRA combines your family income when determining your eligibility for specific government benefits, which can affect your taxes and access to benefits.
You must tell the Canada Revenue Agency (CRA) about your new marital status by the end of the following month after your status changed. You can update this information through your CRA My Account online, or by completing and mailing Form RC65, Change in Marital Status.
It is against the law to lie on your income tax return, including about your relationship status. You run the risk of being reassessed and paying interest and penalties on unpaid taxes. You also risk being denied CPP and other pension survivor benefits.
