Taxes When You Get Married or Move In Together

CRA's definition of spouse and common-law partner

For tax purposes, spouse means a person you are legally married to. Common-law partner means a person who is not your spouse but with whom you are living in a conjugal relationship, and who has been doing so continuously for at least 12 months. The 12-month period can be broken if you lived apart for 90 days or less due to a breakdown in the relationship.

There is one important exception to the 12-month rule: if you have a child together (biological or adopted), you are considered common-law partners from the moment the child is born or adopted, regardless of how long you have lived together.

This matters significantly because CRA links your tax situation to your partner's from that date forward — for benefit calculations, credit claims, and filing requirements.

Spouse or common-law partner amount (line 30300)

If your spouse or common-law partner's net income is below a threshold, you can claim the spouse or common-law partner amount on your return — a non-refundable federal tax credit that reduces your tax owing.

For 2026, the maximum federal spouse amount is $16,129 (equal to the basic personal amount). This amount phases out as your partner's net income rises above $0, and is fully eliminated once their net income reaches $16,129.

The credit value at the federal level is 15% of the claimable amount, saving up to approximately $2,419 in federal tax. Provincial spouse amounts and credit rates apply separately and vary by province.

Update your TD1 federal form with your employer if you now qualify for this credit — it reduces your withholding so you do not wait until filing to see the benefit.

Pension income splitting

Pension income splitting allows the higher-income spouse to allocate up to 50% of eligible pension income to the lower-income spouse. This is reported on Form T1032 (Joint Election to Split Pension Income).

What qualifies as eligible pension income?

• Registered pension plan (RPP) payments — at any age
• RRSP annuity payments — at any age
• RRIF withdrawals — but only if the recipient is age 65 or older
• Life annuity payments from a pension plan — at any age
• QPP/CPP payments — at any age for the purpose of splitting between spouses

The tax benefit

If the higher-earning spouse is paying tax at 33% federal and the lower-earning spouse has no income, transferring $30,000 of pension income to the lower earner's return could save $5,000–$8,000 in combined taxes annually. The lower-earning spouse also gets the pension income tax credit (line 31400) on the split amount, saving an additional $300+ per year.

Spousal RRSP contributions

A spousal RRSP lets you contribute to your spouse's or common-law partner's RRSP using your own contribution room. You get the tax deduction; the money is in their account; withdrawals in retirement are taxed in their hands.

Why it works

Suppose one partner has historically earned much more and will therefore have a much larger RRSP at retirement. By contributing to a spousal RRSP, the higher earner builds retirement savings in the lower earner's name. When both retire, income is more evenly distributed, reducing combined taxes.

Attribution rules — the 3-year wait

The main trap with spousal RRSPs: if your spouse withdraws money from the spousal RRSP in the same calendar year you contributed, or in either of the two following calendar years, the withdrawn amount (up to your total spousal contributions in those years) is attributed back to you and taxed in your hands — defeating the income-splitting purpose.

Wait at least until the third calendar year after your last contribution before any spousal RRSP withdrawal, and the funds are taxed in your spouse's hands as intended.

Using your RRSP room

Spousal RRSP contributions use your RRSP contribution room, not your spouse's. You can contribute to both your own RRSP and your spouse's RRSP, as long as the total does not exceed your available room.

Benefits that change when you become a couple

GST/HST credit

The GST/HST credit is paid to one spouse on behalf of the household. CRA will recalculate your entitlement based on family net income (yours plus your partner's). If the combined income pushes you over the phase-out threshold, your credit will be reduced or eliminated. The credit is not doubled just because there are now two of you — it is a household benefit.

Canada Child Benefit (CCB)

If you have children, the CCB is calculated based on adjusted family net income. Adding a higher-earning partner to the household calculation will reduce the CCB if that partner's income is significant. Update CRA with your new marital status promptly — failure to do so leads to benefit overpayments that CRA recovers later.

Old Age Security and GIS

OAS is paid individually based on years of Canadian residency. However, the Guaranteed Income Supplement (GIS) — an additional payment for lower-income seniors — is based on combined household income. A higher-earning spouse or common-law partner can reduce or eliminate a low-income partner's GIS entitlement.

For OAS itself, the clawback (recovery tax) applies to each individual's income independently — your partner's income does not trigger your clawback, and vice versa.

Property rights: marriage vs. common-law

The legal treatment of property on relationship breakdown is governed by provincial family law, not the Income Tax Act, and varies significantly between provinces. However, it is worth understanding the key difference:

• Married spouses generally have rights to an equalization of net family property on divorce in most provinces (e.g., Family Law Act in Ontario). The matrimonial home receives special protection.
• Common-law partners in most provinces do not have automatic equal-sharing rights to property. Property typically stays with whoever owns it legally. Unjust enrichment claims exist but are litigated, not automatic.

This does not affect your taxes while you are together, but it matters to financial planning — particularly around property ownership and estate planning.

RRSP/TFSA beneficiary designations: update them now

Getting married or moving in together does not automatically update your RRSP, RRIF, or TFSA beneficiary designations. These designations are set when you open the account and remain in place until you change them.

Why this matters

If your RRSP beneficiary is your parent, sibling, or an ex-partner, and you die without updating it, the RRSP proceeds go to that person — not your new spouse. The tax treatment also differs:

• If your spouse or common-law partner is the designated beneficiary, RRSP funds transfer to their RRSP tax-free (a rollover). No immediate tax.
• If a non-spouse is the beneficiary, the full RRSP value is included in your income on your terminal return. A significant tax bill hits your estate.

Contact your financial institution to update beneficiary designations. Also review your will — in most provinces, marriage revokes a prior will, but common-law partnership does not. An updated will after any major life change is essential.

Frequently asked questions