Divorce and Taxes in Canada

Figuring out taxes post-divorce

If you are considering a divorce or separation in Canada, there are some important things you need to know.  This post answers three main questions:

  1. When and how do I tell the CRA about my divorce or separation?

  2. What is considered proof of divorce or separation?

  3. How will my divorce or separation affect my Canada Child Tax Benefit (CCTB) and GST/HST payments?

When do I need to tell the CRA about my divorce or separation?

Separation

If you have separated, the CRA continues to treat you as married until you and your spouse have lived separately for at least 90 days. Once you have lived separately for 90 days, you should notify the CRA by submitting the RC65 Marital Status Change form to your nearest tax centre.  

Divorce

If your marital status changes you must notify the CRA by the end of the month following the month in which your status changed. For example, if your divorce is finalized in June 2016, you must notify the CRA by no later than July 31, 2016.

How do I notify the CRA?

You can notify the CRA of a divorce or separation in any of the following ways:

  1. Complete the RC65 Marital Status Change form and submit it to your tax center

  2. Call 1-800-387-1193

  3. Change your marital status online in your My Account online portal

  4. Send a letter to your nearest tax centre

It’s very important to remember that the CRA may require you to provide proof of separation or divorce at some point in the future. We recommend that you keep proof of your separation or divorce on hand indefinitely in the event the CRA does make this request.

What is considered proof of divorce or separation?

To show that you are living separately from your ex or to show that you have finalized your divorce, the CRA may ask for any of the following:

  • Documents to support your current address, such as: a rental or lease agreement, a letter from the landlord, mortgage papers, property tax bills, utility bills, or insurance policies

  • Medical/dental plan from employer

  • RRSP / RESP – naming beneficiary

  • Drivers license and vehicle registration (front and back)

  • Other Bills (telephone, internet) or Letters (with letterhead) that show the residential address

  • Letters from two different third parties (such as an: employer, social worker, school authority, lawyer, doctor, clergy, insurance company, bank manager) with the following information:

    1. The name and signature of the writer

    2. The profession of the writer

    3. The writer’s contact information, including address and telephone number

    4. The writer has personal knowledge that the recipient did not live with the other individual during the period of of separation

    5. The period(s) of separation

    • A separation agreement or divorce decree showing different addresses for you and your ex, covering the period under review

How does my divorce or separation affect my Canadian Child Tax Benefit (CCTB)  and GST/HST credits?

CCTB

If your marital status has changed and you currently receive CCTB payments, you must notify the CRA of your new circumstances.  If you have joint custody of your children, the CCTB payments will be split between you and your ex. However, the CRA does not split the monthly CCTB amount between two caregivers, regardless of how the child’s actual living arrangements are structured. For this reason, CCTB payments are often provided every other month to a caregiver in a joint custody situation.  In the case of sole custody, only the parent with custody is able to claim CCTB payments.

“What if all CCTB payments are issued to my ex?”

If CCTB payments are issued to your ex, but you have custody or have become the primary caregiver, you must submit two forms to the CRA to begin receiving CCTB payments. The RC65 Marital Status Change form must be submitted along with a RC66 Canada Child Benefits Application form. Once these forms have been received and approved, the CRA will provide you with CCTB payments retroactive to the month you became a caregiver. Since the CRA may ask for proof of care, we recommend that you notify your child’s school administration of a change in your family structure and also keep documentation showing that you are a caregiver.

GST/HST Credits

If you did not apply for the GST/HST credit on your tax return and your status is now separated, widowed, or divorced, you can apply now by writing a letter to your tax centre. Once they review your request, they will send you a GST/HST credit notice advising you of the amount of your GST/HST credit.

If you have separated but continue to live together and share parenting and financial responsibilities, the CRA will not consider you as separated for the purposes for the CCTB or GST/HST tax credits.

More Information

For more information about the Canada Child Tax Benefit you can call the Canada Revenue Agency at: 1-800-387-1193. We recommend calling in the morning for the fastest service.

For more information about the GST/HST credit you can call the Canada Revenue Agency at: 1-800-959-1953. We recommend calling in the morning for the fastest service.

Happy after finishing his tax work

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