La Quinta, CA
(760) 895-3516

Saturday, April 25, 2015

Claiming UCCB Between Spouses - Universal Child Care Benefit

Question: We live and work in Canada and my wife makes more money than I do. We own a corporation and receive T5's each year from a dividend we pay ourselves. That is the bulk of our income. My wife also has some self employment income. We made quite a large donation this year that she will be claiming.

 We received the RC62,  the UCCB for our son in her name.  It seems to be more beneficial for her to claim it under her income but we have been told that the UCCB must be claimed by the spouse or common law partner with the lowest net income. Why is that?

Answer: Yes. If you had a spouse or common law partner on December 31st of the tax year, the partner with the lower net income will have to claim the RC62 on their T1 income tax return regardless of whether your wife's name is on the form.

If you are applying for the GST credit, the RC62 income is not counted towards your income, so don't worry, that won't effect you. 

The reason this is done is because the spouse with the lower income is able to claim  T778 Child Care Expenses Deduction. It seems advantageous to claim the RC62 under her return (even though this is not allowed) because she has exceeded the maximum tax deduction for the donation.

You will need to claim the RC62 as you have the lower net income. I would suggest both of you claiming a portion of the donation so that it is most advantageous for both of you.

We would be happy to review your tax return for you to make sure the outcome is most beneficial for both of you.

Borders Bookkeeping & Tax Preparation

(760) 895-3516