Under what conditions do I need to file taxes as common-law partners?

August 4, 2008 7:20 AM

I've never been quite clear on Canadian common-law taxes. I'm wondering if I have to file with my girlfriend, and what the advantages are.

We've lived together long enough for 2007 (no I haven't filed yet) to count as commonlaw. She was briefly covered by my health/dental insurance from work, and made a few dental claims, as a result of our common-law status.

I didn't work much in 2007 but when I did I was heavily taxed so I imagine there is a bit of a refund in the offing.

We are still together, at the same address.

What are the advantages and disadvantages of filing together?

posted by anonymous to Work & Money (4 answers total)

In Canada you don't file 'together' like you do in the US. Each person must file their own tax return. However, in your case each of you would indicate your marital status as 'Common Law' and then put certain information about each other on your tax forms. For example, you'll have to put her SIN in the box asking for your spouse's SIN, and she'll have to do the same for you. Later in the forms it will ask what her income is (and vice versa).

As for advantages and disadvantages, filing as common law doesn't change a whole lot unless you a) have kids or b) one of you makes way more than the other. If you have kids together, there are certain rebates you can apply for - I'm not familiar with that stuff, as I don't have children. If one of you makes a lot more than the other, you may find that NEITHER of you is eligible for the GST rebate, because your household income will now be your combined incomes rather than your individual incomes. Also, when you file as common law, only one of you can usually apply for the various provincial rebates (if you have any in your province).

Do note that legally you are obligated to file as common law once you qualify. Of course, I suspect you already know this, given you've asked this question anonymously. ;)
posted by nyxie at 8:43 AM on August 4, 2008 [1 favorite]

Something I forgot to mention: Another benefit is if one of you was a student in 2007 and don't need to use all of your tuition on your own tax forms, you can transfer some of that amount to a spouse to lower their income tax payout. Which can in turn increase your total refund.
posted by nyxie at 8:47 AM on August 4, 2008

What nyxie said. You might want to get some tax software and try doing both ways to prove to yourself that it's a good idea. Often just the ability to transfer deductions from on person to the other can make it worth it.
posted by drmarcj at 12:04 PM on August 4, 2008

My ex and I filed jointly for 2006, which roughly doubled our individual returns. But then, I was able to claim some of his tuition amount.

Your best bet is to go to www.quicktaxweb.ca, set yourselves up with accounts, and run through both permutations. As far as I know, and I am not an accountant or tax professional, there is no requirement that you file as common-law. But I would strongly suggest you contact a tax professional to be sure.
posted by dirtynumbangelboy at 1:15 PM on August 4, 2008