When do you and a partner become Common-Law in Canada and how does it effect your taxes?

Under the federal Income Tax Act, common-law couples are treated the same as married couples. The definition of a common-law partner under the Act is:

“A person with whom you live in a conjugal relationship who is not your spouse, and he or she:

• has been living with you at least 12 continuous months (includes any period you were separated for less than 90 days because of a breakdown in the relationship); OR
• is the parent of your child by birth or adoption; OR
• has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.”

Effects of filing  tax as a common-law partner

While you may be able to maximize certain tax credits and deductions when filing as a common-law partner, you may also lose some tax credits you might have been entitled to when filing as a single person because your combined income makes you ineligible. Or, only one partner will be eligible to receive the benefit.

Credits and benefits that you may lose include:

• the eligible dependant credit, which one or both partners may be claiming if they are raising a child,

• the Guaranteed Income Supplement (GIS) and the Allowance (offered under the Old Age Security Program). 

• the GST/HST credit, and

• the Canada Child Benefit (CCB).