For these reasons, professionals and do-it-yourself tax preparers should take the time to study Schedule 5 – Amounts for Spouse or Common-Law Partner and Dependants. It’s the electronic form used to claim dependent family members, and it’s a good idea to print it for review, even if you are using software to file the return. Here’s what you need to know.
Why getting it right is important
Let’s start with the end in mind. Claiming income made by your spouse and dependants correctly will affect other provisions on and off the tax return, including eligibility for tax credits and social benefits like the Canada Dental Care Plan. So that can affect your cash flow down the line.
The following are frequently asked questions with respect to claiming immediate family members.
Who is a spouse for tax purposes? First, the term spouse refers to someone to whom the taxpayer is legally married. It also includes a common-law spouse or partner—that is, someone who is living in a conjugal relationship with the taxpayer for at least 12 consecutive months. That 12-month time frame is moot, however, if the couple has a child with whom they live together at the end of the year. It’s also important to note the spouse can be someone of the same or opposite sex.
Does the spouse need to be resident in Canada? Not necessarily. A spouse also includes someone who is living temporarily outside of Canada but is still considered to be a resident for tax-filing purposes (a “deemed resident”) according to the Canada Revenue Agency (CRA). It is also possible to claim a non-resident spouse. In each of these scenarios, it’s possible to make a claim for the spousal amount.
Where is the claim made? You must complete Schedule 5 and then make the claim on Line 30300 of the tax return. Here’s what’s important and often misunderstood: the claim will depend on the size of spouse’s net world income. Therefore, be sure to report all the spouse’s income from all sources.
What traps arise in reporting the spouse’s income? For the purposes of the spousal amount, you report net income from line 23600 of the spouse’s tax return—that’s after important deductions like RRSP or child-care expenses.
If you got married, started living together during the year, or resumed living together, and you were still together on December 31 of the tax year, you must include the net income of the spouse for the whole year in the calculation for this claim. That’s often a surprise to couples.
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If you separated permanently, and were not living together on December 31, use only your ex-spouse’s net income up to the date of separation.
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How separation plays out with your taxes
In the year of separation, there other issues to consider. If you made support payments to your ex, for example, claim either the support payments or the spousal amount, whichever is to your best advantage. The recipient of the support payments must include them in income and that means paying taxes. Many people are unprepared for this and the fact that quarterly tax instalment remittances may be required throughout the year. A registered retirement savings plan (RRSP) deduction can help.
For the parent who has custody of children, it’s important to note that child support is neither taxable to the recipient nor deductible for the payor. However, there is a possible “equivalent to spouse” claim, known as the Amount for eligible dependants. Each household is only allowed one claim and the dependant must “usually live” with the supporting individual. The dependant doesn’t need to live in Canada. They can be a “deemed resident” who would live with you when not in school or living abroad.
This claim cannot be split with someone else for the same dependant. However, if there are two children of a separated couple who have joint custody, each parent can make the claim for a different child.
Claiming childcare expenses
In the case of claiming a deduction for childcare expenses, it is the person with the lower net income who must claim these expenses. The higher earner may be able to make a restricted claim in certain instances: if the lower earner was attending school full- or part-time, or not capable of attending to the children for at least two weeks due to an infirmity or admission to hospital or confinement to a bed or wheelchair, or imprisonment. The higher earner will be subject to these restrictions even if the couple was separated and living apart at the end of 2025 and for at least 90 days starting in 2025, but reconciled within the first 60 days of 2026.
The dependant child for whom the childcare expenses were incurred must have been under 16 years of age at some time in the year, unless that child had a mental or physical infirmity.
Plan ahead for tax savings
The most you can claim for 2025 is $16,129 if your spouse’s net income is zero. You will reduce that amount dollar-for-dollar by any amount of net income. For these reasons, it can often make sense to have the spouse make RRSP contributions. The RRSP deduction will reduce net income for these purposes.
In addition, the higher-earning spouse can choose to report dividends the spouse received, if by doing so the spousal amount is created or increased. You’ll be able to use up the dividend tax credit to reduce the higher earner’s taxable income, a credit that would be otherwise wasted on the lower earner’s return.
