Have a client who spouse is non-resident. So I prepare the return as usual, put in the spouse information, and on S2, select spouse as non-resident throughout 2015. However, the warning still come out asking me to select the spouse net income is 0. How should I fix this? If I enter an income for the spouse, it will be used toward the calculation of the GST credit, which shouldn’t happen. If I select yes to income being 0, it will claim the spousal amount, which it cannot be claim. Is there a solution to this beside putting a review mark? Or am I missing something?
Hi,
I have same problem and more I could not make the spouse as non-resident !!! if I change her status to non resident his status changed as well.
Please can you help me in how to make her status to be non-resident,
– This is extremely rare, and can only occur on a temporary basis. Are you absolutely sure that (1) the spouse is non-resident at any time, and/or (2) non-resident the whole of 2015? - Recent immigrant-in-process? - Tax Treaties? (In particular, caution regarding section 250(5) considerations regarding the taxpayer). Maybe the taxpayer him/herself isn’t actually tax resident in Canada? This family’s tax situation sounds like it could potentially be quite complex.
“However, the warning still come out asking me to select the spouse net income is 0. How should I fix this? If I enter an income for the spouse, it will be used toward the calculation of the GST credit, which shouldn’t happen.”
– where there is a spouse, you cannot just decide to omit their income… There are a whole lot of income tax act sections that depend upon the income of the spouse being taken into consideration in the calculation…
In particular, on the facts you have outlined, IF the taxpayer is tax-resident in Canada, then your assumption about income for GST credit would appear to contravene requirements of section 122.5 of the act for Income inclusion, and also the spouse does not sound like a qualified relation with respect to the Credit?
Yes, you totally right. Non-resident usually raise a question. I did ask her, when she first immigrate to Canada, did the husband also immigrate? She said no… only herself and children came. Husband never do any type immigration and don’t have a SIN card, nor is PR status. The important part is I believe, he didn’t come with them to Canada. What happen now is, he does come for visit, but each year the stay is < 183 days. Of course, she went back too sometimes. It is complicated.
Clients never have any clue whether they are tax-resident or not, and will usually tell you what turns out to be the opposite, due to their misconceptions and confusion about it, since they usually equate it to be equal to Immigration Canada status, or Medical Plan eligibility, etc, when of course, it is substantially different…
She might not be Resident in Canada for tax purposes (for example by section 250(5) or other)
He might well be Tax-Resident in Canada (for example S250(1)(g) or other)
Since it is not likely that one is Tax-Resident and the other is not, I would not want to file like that at all based on these limited facts…
Each of their detailed Facts and the Act and the Tax Treaty should all be examined carefully to document each step in your determination with each reference that you are relying on before it is possible to determine what type of return needs to be filed, and what needs to go in it
In no circumstances either way does it look like that it is permissible to claim a GST credit, Child Tax Credits etc without including his world-wide income (If they push for wanting to claim Refunds/Credits to which they are not entitled, I have found that it is usually effective to remind them of S239 (2) providing for maximum 200% penalties plus 5 years imprisonment… )
It seems likely that you are probably facing a situation where either (a) She is Non-Resident in Canada for tax purposes or (b) he is deemed Tax-Resident in Canada and should be reporting world-wide income in Canada
I think that it is likely in this situation that I would be asking for a copy of his current and prior foreign country tax returns (from a QUALIFIED firm of accountants there…) and government assessments, also checking for what is being declared there as to tax-residence and the status of the marital household, location of spouse and kids. Location of house and spouse might mean that he has tax-emigrated from the foreign country, per Treaty or otherwise… I would generally expect the result to be that they will both be tax-resident in the same country…
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