- Category: Tax Tips 2018
- Published: Tuesday, 08 January 2019 10:35
Marital status: For tax purposes, your marital status is determined on December 31 of the tax year. So if you are separated on December 31, 2018, you would put “separated” as your marital status. If you were in a common-law relationship, you are only considered separated if the period of separation lasts 90 days or more, so if you separated on December 1, you will not be considered separated on December 30 unless you remain separated on March 1.
Inform the CRA: Breaking the news to the Canada Revenue Agency may not be high on your list of priorities. However, since your GST/HST Credit and Canada Child Benefit is now based solely on your income, it may be to your advantage. Use Form RC65 Marital Status Change to advise them and they will recalculate your entitlement effective for the next payment date.
File a Return: You will have to file a tax return in order to continue receiving the GST/HST Credit and Canada Child Benefit for the next benefit period.
Claim the Spousal Amount one last time: If you supported your spouse or common-law partner while you were together, you can still claim the spousal amount for one last time. The credit will only be reduced by the amount he or she earned before you separated.
Child Support and Alimony: If your ex is paying child support, it is not taxable to you. Nor can they claim a deduction for it. However, periodic spousal support payments are taxable to the recipient and deductible to the payer as long as they are made pursuant to a court order or written separation agreement.
Deadbeat Parents: If you fall behind with your child support obligations, you may find that the amount owing is withheld from your income tax refund.
Education Property Tax Credit: This credit is available to qualifying individuals who paid rent or property tax on a principal residence in Manitoba and have not received the advance. The basic credit for 2018 is $700 but certain conditions must be met. If your income is below a defined level, or you are a senior, you may qualify for an additional amount.
TAX TIPS FOR THE SINGLE PARENT
Eligible dependants: In 2018 single parents are allowed to claim $11,809, the amount for an eligible dependent (previously referred to as equivalent to spouse), for one of their children. You have to support your child in a dwelling which you live in and maintain.
Joint custody: If there are two children and the parents share joint custody, then each parent can claim the eligible dependent amount for one child. But if you are required to pay child support, you cannot claim this credit.
Canada Child Benefit: Your CCB payments are calculated for the period of July of one year to June of the next year using the following information:
- The number of children that live with you
- The ages of your children
- Your adjusted family net income
- Your child’s eligibility for the child disability benefit
In joint custody situations, the benefit can be split.
Child Support: If your agreement is dated after May 1, 1997 then child support payments are neither taxable nor deductible although you do need to report them on your tax return.
Child Activities: Both the Children’s Fitness Amount and the Children’s Arts Amounts have been eliminated as of 2017, however you may still be able to claim a provincial amount for fitness and arts for your child.
Child Care: Child care expenses can add up but you must have receipts from your daycare or babysitter. If you are paying a family member to look after your children, this can be claimed as long as they are 18 or over and provide a receipt with their SIN. They will also need to report this income on their tax return. The maximum dollar limits in the calculation of the deduction for child care expenses are as follows:
- $8,000 for children under 7;
- $5,000 for children aged 7 to 16 and infirm children over 16;
- $11,000 for disabled children
Changing status: If you move in with the other parent of your child, you are considered common-law for tax purposes immediately. If you move in with someone else, you are only considered common-law after you have lived together for a year. If you get married or become common-law, you need to report the change to the Canada Revenue Agency using a RC65 Form. This will affect your ability to claim the eligible dependent amount as well as your Child Tax Benefit calculation.
A tax professional at H&R Block Winkler or Morden can talk about other credits and deductions that may affect you. Call 204-325-9856 (Winkler) or 204-822-1287 (Morden) to schedule an appointment.