Tax implications of divorce or separation

You are separated if you have been living apart from your spouse or common-law partner for 90 consecutive days or more because of a breakdown in your relationship, you have not reconciled and you receive the Canada child tax benefit (CCTB) you should file immediately the form RFC-65, ELECTION TO CHANGE MARITAL STATUS.

The reason is that you receive the CCTB according to your family income, husband and wife combined income. At separation the family income decreases, only one person can claim the children as equivalent to married and therefore, the CCTB will increase.

To continue receiving the CCTB, you and your spouse or common-law partner have to file a tax return every year, even if you have no income to report. CRA base the amount of the benefits you receive on the number and ages of the children you have, and on information from your and your spouse’s or common-law partner’s tax returns.

There are also new implications on the separation of common-law spouses.