Why would my wife's low income T4 cause my Total Taxes line to increase dramatically?

[Scimiter]

My income sits around 33K and my wife's only about 12K. Before entering her T4 my return is over 3500 but when her's is added it's my credits that are reduced.

[Scimiter]

Edit: Just noticed I put this in the wrong spot

We are living common-law so does that allow us to file separately to negate some of this effect?

[TonyC11 · Accepted solution]

Yes, her income, though low, is just enough to eliminate the large spousal credit of $11138,
This credit is worth $1600 in federal tax alone.

[Scimiter]

We are living common-law so does that allow us to file separately to negate some of this effect?