Why do I get charged more tax based on my spouses' income?

[Tax-Person-Canada]

If I just put in my T4, I get a return of 1300, but when I enter my spouses T4s, my return drops down to -186.28 even though my spouse paid tax on their income. I have a screenshot of the before and after summary if that helps. It says my Total Taxes goes up after entering my spouse's income

[TurboTaxJeffrey · Accepted solution]

Depending on your spouse's income, you may or may not be entitled to part or all of the Spousal Credit.  If you have entered your own income, but not your spouse's income, then as far as the software knows, your wife's income is zero, and it calculates the full $11,327 spousal credit for yourself.  There is also a corresponding provincial credit, what that amount is varies according to the province of residence.  The spousal credit is calculated by subtracting your wife's income from $11,327, the difference being the credit.  So by letting the software know that your wife had income, it will recalculate the spousal credit.  If your wife's income is greater than $11,327 then the spousal credit is zero.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/303/menu-eng.html