Line 423 – Family Tax Cut
You may be able to claim this credit if you were married or living in a common-law partnership and you and your spouse or common-law partner:
were not living separate or apart because of a breakdown in your relationship for a period of 90 days or more including December 31, 2015;
were both residents of Canada on December 31, 2015 (or if either person died in the year, at the date of death); and
both file a return for the year this credit is claimed.
You or your spouse or common-law partner must have also ordinarily lived throughout the year with your child who is under 18 years of age at the end of the year. Because of a joint custody arrangement, your child may have ordinarily lived with both you and your former spouse or common-law partner throughout the year.
You cannot claim this credit if:
you are confined to a prison or similar institution for a period of 90 days or more during the year;
your spouse or common-law partner is claiming the credit for the year;
you or your spouse or common-law partner became bankrupt in the year; or
you or your spouse or common-law partner has elected to split eligible pension income.
The credit is calculated based on the net reduction to your and your spouse’s or common-law partner’s combined federal taxes, as if an amount up to a maximum of $50,000 in taxable income was transferred from the individual with the higher taxable income to his or her spouse or common-law partner.
The maximum amount you can claim is $2,000.
Unlike pension income splitting, your net income and the net income of your eligible spouse or common-law partner will not change if you claim the Family Tax Cut. As a result, benefits and tax credits that are calculated based on net income, such as the GST/HST credit, the CCTB, the age amount, and the spouse or common-law partner amount, will not change.
Completing your tax return
Complete Schedule 1-A, Family Tax Cut, to calculate your claim. Enter on line 423 of Schedule 1, Federal Tax, the amount from line 23 of the completed Schedule 1-A.
Make sure you enter your marital status and the information concerning your spouse or common law partner (including his or her net income, even if it is zero) in the "Identification" area on page 1 of your return.
To receive the maximum benefit of this credit, make sure you and your spouse or common-law partner claim all of the non-refundable tax credits you may be entitled to when completing Schedule 1, even if you don't need the amounts to reduce your or your spouse or common-law partner's tax.
Forms and publications
- General income tax and benefit package - Guide, return and schedules
- Schedule 1-A, Family Tax Cut (except Quebec and non residents)
- Schedule 1-A, Family Tax Cut (Quebec and non residents only)
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