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Spousal Equivalents 

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Tax Forum

Spousal Equivalents

Taxpayers can claim the eligible dependant amount for a child, even if the child lives with them only part of the year.


The eligible dependant amount (previously called the equivalent-to-spouse credit) permits a taxpayer to claim someone other than his or her spouse as a "spouse" for tax purposes. This credit is available only to taxpayers who do not have a spouse and meet the many conditions imposed under this provision. In Ellis L.G. Barefoot (appellant) v. Her Majesty the Queen (respondent) [2002-1058(IT)I], the Tax Court of Canada was asked to rule whether a taxpayer was entitled to claim this credit for his son.

Barefoot and his wife separated on August 1, 2000. They had two children, a boy aged four and girl not yet a year old. Barefoot's wife continued to live in the family home with the children. However, when she was at work, Barefoot picked them up from daycare, took them to the family home, fed them and cared for them until she returned from work. When the mother worked on weekends, he looked after the kids at his apartment for the entire weekend.

The couple had an informal agreement, not ordered by the court, in which Barefoot initially paid his ex-wife $857 per month in child support. This payment was later changed to $887 per month. He also paid an additional $400 per month in spousal support.

Relying on information contained in the General Income Tax and Benefit Guide, Barefoot claimed his son as equivalent-to-spouse in filing his 2000 income tax return. His former spouse did not claim this credit that year.


The Minister of National Revenue disallowed Barefoot's equivalent-to-spouse claim on the basis that he did not meet the conditions set out in paragraph 118(1)(b) of the Income Tax Act. Barefoot appealed to the Tax Court of Canada.

Paragraph 118(1)(b) states the following conditions for someone claiming this deduction for a child:

(b) Wholly dependent person — in the case of an individual who does not claim a deduction for the year because of paragraph (a) and who, at any time in the year,

(i) is

(A) a person who is unmarried and who does not live in a common-law partnership, or

(B) a person who is married or in a common-law partnership, who neither supported nor lived with their spouse or common law-partner and who is not supported by that spouse or common-law partner, and

(ii) whether alone or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is

(A) except in the case of a child of the individual, resident in Canada,

(B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case
may be,

(C) related to the individual, and

(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity,

At trial, Barefoot argued that he did not have to meet all of the conditions required by paragraph 118(1)(b) simultaneously. He claimed that as long as he met each condition at some time during the year, he was entitled to the equivalent-to-spouse credit. The court looked at both the English and French versions of paragraph 118(1)(b) and concluded that there was no ambiguity in the wording, and that all of the described conditions had to be met at the same time during the course of the year. Additionally, only one parent was entitled to claim a particular child as equivalent-to-spouse for a year, as set out in paragraph 118(4)(b).

Since only Barefoot had made the claim in 2000, the court then had to decide if he otherwise qualified for the credit. The Canada Customs and Revenue Agency did not dispute the fact that Barefoot was an unmarried person living apart from his former spouse, nor did it dispute that he maintained a self-contained domestic establishment in which he was living. However, it did not agree that he actually supported his child in his apartment or that his son was wholly dependent on him for support. Counsel for the Minister argued that the child living with Barefoot on the weekends was not sufficient to be considered support.

Attention then turned to Barefoot's financial support of the family. Subsection 118(5) states that a person will not be able to claim the credit in the following instance:

...where the individual is required to pay a support amount (within the meaning assigned by subsection 56.1(4)) to the individual's spouse or common-law partner or former spouse or common-law partner in respect of the person and the individual

(a) lives separate and apart from the spouse or common-law partner or former spouse or common-law partner throughout the year because of the breakdown of their marriage or common-law partnership; or

(b) claims a deduction for the year because of section 60 in respect of a support amount paid to the spouse or common-law partner or former spouse or common-law partner.

Barefoot and his ex-wife had entered into an informal arrangement, which did not require Barefoot to make support payments. Because he was not required to make the payments, the restriction did not apply to him. Since child support payments are no longer deductible by the payer, nor taxable to the recipient (see " Tax Forum," CGA Magazine, May-June 2003), not having a formal support agreement allows for the possibility of claiming the eligible dependant amount.

In making its decision, the court relied on the decision of the Tax Court in Issac v. Canada, [1994 T.C.J. No. 952 (QL)]. In that case, the judge stated the following with respect to paragraph 118(1)(b):

I conclude from the case law and from a reading of the paragraph that the phrase "at any time in the year" can be intermittent periods during the year, and that the phrase "wholly dependent" can relate to those intermittent periods. Thus in any period during the year where a person is wholly dependent on the taxpayer and the other paragraph 118(1)(b) elements and other requirements are present, the taxpayer is entitled to the "equivalent-to-married" credit.

Based on this statement, the court held that Barefoot met the conditions of paragraph 118(1)(b) at some time during the year, and allowed his appeal.


The equivalent-to-spouse credit seems to be one of the most misunderstood provisions of the Income Tax Act. Yet, it is one of the clearest.

I've had to explain to clients that they could not claim the deduction for a child when they were already married and living with their spouse. One enterprising client, who lived with his wife and two children, decided that he would claim one child as equivalent-to spouse, and his wife would claim the other. When I asked where he got such a grand idea, he said that he had read it in the newspaper, and produced the column, neatly highlighted, for my enlightenment. I have to admit that I got some perverse enjoyment out of pointing out the required conditions outlined in the rest of the article.

Being in a common-law relationship won't allow you to bypass some of these conditions either. Prior to 1993, it was common for couples living in a common-law relationship to each claim the equivalent-to-spouse deduction for children living with them. For example, a couple, both divorced, each with a child from their previous marriage, live together in a common-law relationship. Both parents would claim the equivalent-to-spouse deduction for their respective child. In 1993, the law was changed to permit only one equivalent-to-spouse deduction per household. This, along with the change in the law that gave common-law relationships the same responsibilities and benefits as legally married couples, removed the tax advantages previously enjoyed by common-law couples.

I have also had clients who were not aware that this credit is available to them. The most frequently missed claim involves the support of elderly parents or other family members. A colleague recently became a hero to a new client when she pointed out that the client was eligible to claim the credit. The client was a widow whose mother lived with her. The mother was not capable of looking after herself, was not old enough to collect Old Age Security, and, never having worked, could not collect CPP. The mother had a very small CPP survivor pension. When the client found out that she could claim the equivalent-to-spouse credit for her mother, she was ecstatic. No one had suggested the possibility to her before.

Clients often think they can't claim the credit for a child because the child did not live with them for the entire year. However, as the Act states, and as Barefoot proved, the person must be dependent on the taxpayer during the year, not throughout the year. It took the ingenuity and persistence of one individual to illustrate the tax breaks available to many.

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