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.
T1 Programs Division Business and General J.M. Legault, Director Division
Paragraph 118(1)(b), Equivalent-to-married tax credit
This is in reply to your memorandum of June 10, 1993. You have queried whether individuals A and B, in the following situation, are each entitled to a married equivalent tax credit as provided for in paragraph 118(1)(b) of the Income Tax Act (the Act) in the year of their marriage.
A and B are divorced individuals each supporting their children in separate self-contained domestic establishments at the commencement of the year. Each is entitled to an equivalent-to-married amount under paragraph 118(1)(b) of the Act in respect of one of their minor children. During the year, A and B marry one another and thereafter reside together with their children in the same self-contained domestic establishment. Neither A nor B can claim the other for the purposes of the married tax credit provided for in paragraph 118(1)(a) of the Act because the income limitations are exceeded. Your query has been raised because of statements in paragraphs 11 and 18 of Interpretation Bulletin IT-513, Personal Tax Credits.
The comments in paragraph 11(a) of Interpretation Bulletin IT-513 stating that a taxpayer is allowed the most beneficial deduction in computing income or tax credit of any to which the taxpayer is entitled during a year in which a change in marital status occurs reflects an administrative policy of long standing. References permitting the most advantageous claim in the year of marriage have been traced to at least 1959. We believe that to allow the most beneficial deduction in this situation is consistent with the administrative position discussed in the year of separation as outlined in the example in paragraph 11(a) of Interpretation Bulletin IT-513 and publicized in the T1 Guide. While it is arguable that a deduction under paragraph 118(1)(b) of the Act be denied on the basis that this deduction is only available to an individual "not entitled to a deduction by reason of paragraph (a)", we recommend that you continue the long standing practice of permitting the deduction that is most beneficial to the taxpayer in the year in which a change in marital status occurs.
E. Wheeler A/DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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