Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
1. Whether two individuals are entitled to claim the married tax credit in respect of the same person in the year where the former spouse dies and the surviving spouse re-marries.
2. Does subparagraph 118(1)(a)(ii) of the Act apply to reduce the amount that may be claimed as a tax credit when all of the surviving spouse's income is earned after the death of the former spouse.
Position: 1. Yes. 2. Yes.
Reasons: 1. Subject to subsection 118(4) of the Act, the married tax credit is available to anyone that is married "at any time in the year".
2. The married tax credit is reduced by the spouse's income "for the year".
A. Seidel
XXXXXXXXXX (613) 957-2058
2003-005025
January 9, 2004
Dear XXXXXXXXXX:
Re: Personal Tax Credits - Married Status
Your November 21, 2003 e-mail to Don Maule, concerning the personal tax credit for married status, has been forwarded for our reply.
Paragraph 118(1)(a) of the Income Tax Act (the "Act") provides a tax credit to, an individual who "at any time in the year is a married person ... who supports the individual's spouse ... and is not living separate and apart from the spouse ... by reason of a breakdown of their marriage". The maximum married tax credit is $6,055. This amount is reduced by the amount of income earned by the spouse for the year that is in excess of $606. (Pursuant to subsection 118(3.1) of the Act, the $6,055 and $606 amounts are adjusted from time to time. For 2004, these amounts are $6,800 and $680, respectively.)
Subsection 118(4) of the Act imposes certain limitations that are applicable for the purposes of claiming tax credits pursuant to subsection 118(1) of the Act. In particular, paragraph 118(4)(a) of the Act provides that no amount may be deducted by an individual in a taxation year, under subsection 118(1) of the Act, because of paragraphs (a) and (b) of the description of B in subsection 118(1) of the Act, for more than one other person.
In the year of death of a spouse, the deceased spouse will be entitled to a married tax credit, subject to the income reduction, since the deceased spouse was married "at any time in the year". Similarly, where the surviving spouse re-marries in the same taxation year, the new spouse will also be entitled to a married tax credit, subject to the income reduction and the application of paragraph 18(4)(a) of the Act, since the new spouse is also married "at any time in the year". If the surviving spouse earned income at any time in the year, the married tax credit claimed by the deceased spouse and the new spouse would be reduced for the total income "of the year" of the surviving spouse.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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