Does my net income dramatically affect my wife's taxes while she is on maternity leave?

[darryl-stahlke]

My wife was on Mat-Leave for most of 2017.  When I create my tax return and my wife's tax return separately in TurboTax we both have small returns; that is if I do not enter in each other's net income (line 236) in the spouse information section.  Once this has been done we both owe, me a few hundred and my wife a few thousand!  How can this be?  I get the same result if I create our tax returns together.  Can someone enlighten me on what may be going on?

[TurboTax-Esther · Accepted solution]

When you created the return individually without entering the other spouse's income, you were given the spousal credit with Turbo tax assuming the other spouse had no income. 

Once you enter the income of the other spouse, the spousal credit is eliminated. This is the correct way. There is never a benefit to preparing the returns individually as it is more work entering each other's info in twice. 

You wife received EI for Maternity leave. EI never takes off enough taxes. Check her T4E and look at the income compared to the taxes deducted.