26 May 1998 External T.I. 9804275 - SHARING OF EQUIVALENT TO SPOUSE EXEMPTION

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 Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether equivalent to spouse exemption can be shared.

Position: Only one person can claim the exemption on his or her tax return.

Reasons: clear wording of 118(4)(b) ITA.

		980427
XXXXXXXXXX 	N. Mondou, M.Fisc.
(613) 957-8961

May 26, 1998

Dear Madam:

Re: Equivalent to Spouse Exemption

This is in reply to your letter dated February 17, 1998, in which you requested our views concerning the sharing of the equivalent to spouse exemption by parents under a shared parenting agreement.

The situation outlined in your letter involves an actual fact situation. As it relates to a past transaction you should contact the tax services office of your area, since the review of such transactions falls within their responsibility. However, we offer the following general comments.

An individual who does not claim a spousal tax credit for the year and who, at any time in the year, was not married, or was married but did not support nor live with his or her spouse and was not supported by his or her spouse, may claim an equivalent-to-spouse tax credit for a qualified relative. For this purpose, “spouse” will include common law spouses referred to in subsection 252(4) of the Income Tax Act (the “Act”).

Because of paragraph 118(4)(b) of the Act, the equivalent-to-spouse tax credit cannot be claimed by more than one individual for the same person. This applies, for example, when there has been a marriage breakdown, and the spouses or former spouses who have joint custody of a child would both otherwise qualify for the equivalent-to-spouse tax credit for that child. In such a case, the equivalent-to-spouse tax credit may be claimed by only one individual. Such claims cannot be shared by having individuals each claim a portion of the credit on their returns, even though there is agreement to share the claim. If the individuals are unable to agree as to who should claim the tax credit, neither can claim the credit.

You will find more details with respect to the equivalent to spouse exemption in the enclosed copy of Interpretation Bulletin IT-513R (“Personal Tax Credits”).

We trust that these comments are of assistance but caution you that they do not constitute an advance income tax ruling and, accordingly, are not binding on the Department with respect to any particular transactions.

Yours truly,

P. Spice
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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