Moving in together? Think tax benefits

For couples, living together can affect taxes.

Tax laws in Canada are the same for common-law partners as they are for married couples, says Hélène Marquis, Regional Director of World Advisory Services at CIBC.

Common-law partners are couples who have been living together for 12 months or longer, or who have a child together. Common-law partners must file a tax return as a couple.

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“You’re considered married for provincial tax purposes at the moment the union takes effect.”

But what does a couple have to consider when filing taxes together?

An official union, regardless of its form, affects government grants that can be awarded to children or seniors in a family. “When you’re in a common-law or marriage situation, it’s your family’s net income that is used to calculate those grants,” says Marquis.

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Common-law partners can also, like married couples, take advantage of spousal RRSPs. They can contribute to each other’s TFSAs and reap the benefits of pension income splitting.

“This is something to consider because it may impact your family more than you’d think,” says Marquis.

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