Non-Resident Spouse on a Canadian Return: What to Enter

Spouse non-resident: what goes on your Canadian return?

If you are a Canadian resident and your spouse or common-law partner lives abroad, you still report them as your spouse. Tick married or living common-law based on your status on December 31, enter their number, and enter their net world income in Canadian dollars, even if it is zero (CRA: marital status; CRA: line 30300). You do not add their foreign income to your own income; it only feeds the spouse fields, your credits and your benefits.

A case stops being simple when either of you may be resident in two countries, your spouse earns in several currencies, the year is a departure year, or you receive the Canada child benefit. Whether each of you is resident at all is a separate question: see Canadian tax residency.

What to gather:

• Your spouse's SIN, temporary tax number (TTN) or individual tax number (ITN), if they have one.
• Pay slips, bank statements and their foreign tax return, enough to rebuild January to December income from every source.
• The dates each amount was received, for the exchange rate.
• The date your spouse left or arrived, if it was during the year.
• Records of money you sent or bills you paid for your spouse, if you claim the spouse amount.

Is a spouse living abroad still my spouse for the return?

Yes, if you live apart for work, school or health reasons. The CRA treats you as separated only when you have lived apart for at least 90 days because of a breakdown in the relationship (CRA: marital status). Distance alone does not make you separated, and the CRA pension splitting page confirms that spouses living apart for business reasons are not treated as separated.

Common-law needs a history: a partner counts only if you lived together in a conjugal relationship for 12 continuous months, or you have a child together (Income Tax Act, section 248(1)). A partner abroad who never lived with you is not a common-law partner for the return.

Ticking "separated" when the relationship has not broken down changes your credits and your benefits, and the CRA can reassess it.

What do I enter in the spouse fields?

Enter three things: your marital status on December 31, your spouse's SIN, TTN or ITN, and their net world income in Canadian dollars (CRA: marital status; CRA: line 30300).

The CRA may ask for documents that support the income you entered (CRA: line 30300). Entering zero for a spouse who earned income abroad overstates your credit.

Do I report my wife's or husband's foreign income, and how do I work it out?

You report it in the spouse field, not as your income. Net world income is the amount that would be on line 23600 if your spouse filed a Canadian return: all income from inside and outside Canada, less the deductions a Canadian return would allow (CRA Guide 5013-G).

1. List every source: salary, business profit, rent, interest, dividends, pensions and gains, for January to December. If your spouse's country taxes a different year, such as April to March, rebuild the calendar year from pay slips and statements; do not copy the foreign return's total.
2. Use Canadian rules, not the other country's. An amount that country exempts may still count here.
3. Convert each amount at the Bank of Canada rate in effect on the day it arose; for amounts paid at various times in the year, use the annual average rate (CRA: line 10400).
4. Subtract only deductions a Canadian return would allow.
5. Keep the worksheet and the source documents.

For how specific foreign income is treated, see foreign income on a Canadian return.

Can I claim the spousal amount if my spouse lives abroad and earns little?

You may, if at any time in the year you supported your spouse and their net world income is below your basic personal amount (CRA: line 30300). The CRA defines support as contributing to your spouse's living expenses or other financial needs.

Under section 118(1)(a), the claim is your basic personal amount (at most $16,452) minus your spouse's net income, plus an extra amount if your spouse depends on you because of a mental or physical infirmity. Each dollar of foreign income lowers the claim by a dollar. Work it out on Schedule 5. The amount is not a refund: your federal credit is the amount times the lowest federal tax rate. Only one spouse can claim the amount in a year.

The provinces have their own spouse amount on Form 428, with their own figures; Quebec residents follow Revenu Québec's rules.

Can I transfer my spouse's unused credits or split pension income?

Transfers: limited if your spouse was non-resident all year. Line 32600 lets you take your spouse's unused age, pension, disability and tuition amounts, and the caregiver amount for an infirm child under 18, unless you were living apart because of a breakdown on December 31 and for 90 days or more starting in the year (CRA: line 32600; section 118.8). A spouse not resident in Canada at any time in the year cannot claim the age, pension or caregiver amounts unless all or substantially all their income is taxed in Canada, so those cannot transfer (section 118.94). The disability and tuition amounts are not on that list; confirm before claiming them. If your spouse does not file a Canadian return, the CRA asks you to attach slips showing their income; keep your net world income worksheet too.

Pension splitting: not available that year. Both of you must be resident in Canada on December 31 (or at death), and you elect together on Form T1032, attached to both returns (CRA: pension income splitting). When both qualify, up to 50% of eligible pension income can be allocated.

Moving money or property to a spouse to shift income is a different rule; see transferring property to family.

How does a non-resident spouse's income affect the CCB and the Groceries and Essentials Benefit?

For the Canada child benefit, file Form CTB9 every year your spouse was non-resident for all or part of the year, even if their income was zero (CRA: Form CTB9). The form asks for income from all sources not reported on a Canadian return, converted at the Bank of Canada rate when received, for the non-resident period. You, as the benefit recipient, sign it. For the months your spouse was still resident, the form tells you to make sure they file their own Canadian return, even with no income.

The Canada Groceries and Essentials Benefit, which replaced the GST/HST credit, uses family net income that includes a non-resident spouse's income from all sources for any part of the year either of you was non-resident (CRA: RC4210). You cannot get an amount for your spouse for a payment month that starts while they are non-resident (CRA: RC4210).

Which benefits stop when you leave is covered in benefits after leaving Canada.

Does my non-resident spouse have to file a Canadian return?

Possibly, depending on their Canadian income. A non-resident may need to file for employment income earned in Canada, a business carried on in Canada, or a taxable gain on certain Canadian property (CRA: non-residents). For dividends and pensions, correct non-resident withholding is generally the final tax. Canadian rent can be reported on an optional separate return; see non-resident landlords. Entering their income on your return never replaces a return they must file; see non-resident Canadian returns and catch-up.

In my departure year, which period of my spouse's income do I report?

On your departure-year return, enter your spouse's net world income for the period you were resident in Canada (CRA: leaving Canada). Your non-refundable credits, including the spouse amount, may be limited in that year. If you stay resident and your spouse leaves during the year, the CRA does not spell out which period of their income to enter; get individual tax help. If you and your spouse left on different dates, see spouses leaving Canada on different dates.

Example

These examples are illustrative; figures are in Canadian dollars.

Spouse never moved

Raj lives in Toronto. His wife lives in Mumbai and earned the equivalent of C$9,000, converted at Bank of Canada rates. Raj sends money for her household costs, so he supported her. He enters C$9,000 as her net world income. His spouse amount is his basic personal amount minus C$9,000: smaller, but not gone.

Pension split refused

Ellen, a Canadian resident retiree, wants to split C$40,000 of pension income with her husband, who became non-resident in June. He is not resident on December 31, so Form T1032 is not available for that year. Ellen reports the full C$40,000.

Children stay in Montreal

Lucas and the children stay in Montreal while his partner takes a job in Dubai and becomes non-resident in March. Lucas files Form CTB9 that year with her income from March to December, and again every year she stays non-resident. She also files a Canadian return for January and February, when she was still resident. Her salary also counts toward the family income used for his Groceries and Essentials Benefit.

Different for you?

• Either of you may be resident in two countries: start with Canadian tax residency and get individual tax help.
• Your spouse earns in several currencies or from a business abroad: working out net world income needs Canadian rules applied to foreign figures; get individual tax help.
• You and your spouse left on different dates: see spouses leaving Canada on different dates.
• Your family stays in Canada while you work abroad: see family stays in Canada while you work abroad.
• Your spouse has Canadian income or missed returns: see non-resident Canadian returns and catch-up and get individual tax help.
• The CRA asked for proof of your spouse's income, or past returns show zero income or "separated" when you were not: see a CRA letter while living abroad and get individual tax help.
• This is your departure year: credits, the spouse income period and departure rules interact; get individual tax help.
• Your spouse has no SIN: see filing without a valid SIN.
• You also file in the US: see married to a nonresident.