On the Manitoba Family Tax Benefit, CRA adjusted one of my client’s returns last year to add the claim for “Age amount for spouse or common-law partner who was born in 1957 or earlier”. That field did not calculate last year and I missed noticing it. It also is not calculating this year either (1958 or earlier), thus requiring a manual override.
Please review.
I tried a very simple return with a spouse with no income and line 5 of the MB428A, “Age amount for spouse or common-law partner born in 1958 or earlier”, calculated as expected. It must be because there is no net transfer from spouse on the MBS2.
Per the Manitoba guide, (https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/manitoba/5007-pc.html#h-4)
“Claim $2,065 if you claimed a transfer of your spouse’s or
common-law partner’s age amount on line 1 of your Schedule MB(S2) and the amount on line 1 is more than the amount on line 11 of that schedule.”
Line 1 is the age amount from the spouse’s MB428 and line 11 is their adjusted taxable income…in other words the age amount is not all being used by the spouse.
Our calcs follow this logic.
Going a step further, the Manitoba Income Tax Act has this in paragraph 4.6(16.1)(viii) “$2,065., if the individual claimed an amount for the year under subsection (16) in relation to an age credit deductible under subsection (4) by the individual’s spouse or common-law partner.”
Subsection (16) is the Amounts transferred from spouse or common-law partner.
Subsection (4) is the Age amount.
All that to say that if there was no net transfer of the spouse’s age amount on the client’s MBS2, then they got lucky.
Thank you, Allen.
The CRA modification was documented in the client’s 2022 NOA with the simple message:
“We changed your Manitoba family tax benefit from $90 to $2,155, which is the maximum allowed. For more about this benefit, see the explanation for line 61470 on the provincial information sheet in your tax forms book.”
The only thing I could pin it to was Line 60700, as there is no disability claim and no children, and the husband was born in 1956. Being busy with tax work, I didn’t take time to fully research so appreciate your detailed explanation.
The husband’s Net Income is $23,316, so no spousal transfers occurred leaving me perplexed. And yes, the amount on Line 1 of MB(S2) is not greater than the amount on Line 11, clearly ruling out Line 60710 as you insightfully predicted.
I guess I must concur that this was a CRA programming glitch. A gift to my client, LOL.
I’ll undo the override on the 2023 tax return. Thank you, @Allen.