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| *The Commerce Journal>>>Canada Taxes |
Can you claim your spouse on your income tax if they are a stay at home parent? |
I live in Ontario, Canada, and i am wondering if I chose to stay at home with my 2 young children could my husband claim me as a dependant on his taxes?? Yes, your husband can claim you on his taxes. Take a look at a tax return, and you'll see how it works. One of your edits makes a note of him receiving $7,000 back for claiming you - that won't be the case. Another poster has already worked out for you the amount he'd receive, so I won't do it again. Since you seem to make an amount close to $7,000, I should also note that with daycare expenses, it is likely that all of your income will be below the basic personal amount, so you won't be paying taxes on that income. It isn't really a tax based decision; the other financial factors to consider would be the work clothing, commuting costs, day care, and possible GSTC and CCTB credits. You might also consider the impact of leaving the workforce, and the increased dependence you'd have on your husband's income - does he have a stable job? Would he need to take on a second job to make this happen? Absolutely! Nice choice, too, by the way. yes he can claim you BUT you have to make less than the basic personal ammount throughout the tax year (2006 it was $8839). But by not working or paying taxes you will no longer recieve a tax refund unless there is a provincial refundable tax credit that everyone gets if they make under a certain amount in the year ( like the British Columbia tax credit- $75 to anyone over 19 that has made less then $15000 in the year) I will answer your question in a purely number perspective. If your income is $0, then your husband can claim the spousal credit. This will result in the following reduction of 2007 tax for your husband: Federal: $7,581 X 15.5% = $1,175 Ontario: $7,262 X 6.05% = $439 Therefore, the total reduction of tax for your husband should you choose to make zero income is only $1,614. Therefore, based on the numbers alone, you would be better off going to work if you can earn an amount that is more than $1,614 + the cost of hiring baby sitter. Also, be aware that the cost of hiring the baby sitter can be claimed (within certain limits based on the age of your children) by the lower-income spouse as a deduction from your income. Therefore, say you are the lower income earning spouse and you earn a $15,000 paycheque, and you hire a babysitter for $7,000 for your two children. Your taxable income will become $8,000. This save you about $1,400 of tax. For more information on the child care expense deduction, see: http://www.cra-arc.gc.ca/agency/resource... and http://www.cra-arc.gc.ca/e/pub/tp/it495r... If you are only making $7000. net, you are better off to stay at home. Your husband will get to use the "married" deduction, and you will probably get the child tax credit and other benefits, depending on your husbands salary. Definitely worth investigating, try a good tax accountant, even if he charges you a few dollars for the information, it could save you 100s, if not 000s. Good luck |
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