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What is the Penalty for Filing Single When Common Law

What is the Penalty for Filing Single When Common Law Featured Image

A common-law relationship is considered as same as a marital relationship in Canada. On the other hand, you have to face a penalty if you file single when in a common law relationship.

This article will go through all the details about the common-law relationship and what will happen to you if you don’t indicate your current relationship status in your tax return.

So, without further ado, let’s begin.

Definition of Common-law Partner

According to Candian law, you have to qualify as a common-law partner for tax purposes. And to get the recognition, a taxpayer has to be cohabiting in a conjugal relationship for a minimum of 12 months.

On the other hand, a cohabiting couple with a child is automatically acknowledged as a common-law partner regardless of how long they live together. The child can be their own or adopted.

If your common-law partner has or had custody of your child, and your child is wholly dependent on them for the living, your relationship will be recognized as a common-law relationship. Even if you live together for less than 12 months, you will get this status.

Read Also: Cohabitation Agreement

What’s the Difference Between Being Married and Living Common-Law?

There is a slight difference in being married couples and common-law couples. While common-law couples have to live together for at least 12 months in a row to get the status, a married couple can claim it as soon as they get married.

How should You File Your Tax Return as a Common-law Partner?

In Canada, couples have to file their tax return separately. However, if you and your partner are recognized as common-law partners by Canadian law, you must indicate your status on your tax return. You have to provide information like your partner’s name, social insurance number, and net income.

The Canada Revenue Agency (CRA) then calculates the government benefits based on the total income of you and your partner. You will become eligible for certain tax credits and benefits based on your household income.

Read Also: How Do You File Taxes If You are Separated?

The Reason for People Filing Single Despite Being in a Common-law Relationship

When filing your income tax return as a common-law partner, you will receive both benefits and disadvantages depending on the situation. Although you may be capable of getting certain tax credits and deductions, you may also lose some credit benefits, which include–

  • GST/HST credit
  • Canada Child Benefit (CCB)
  • Eligible dependant credit (a single parent who raises a child can claim this)
  • Guaranteed Income Supplement (GIS) and the Allowance offered under the Old Age Security Program

The most typical cases of people filling single happen because of the GST/HST rebates. Those earning less try to get this benefit by lying about their relationship.

What Happens If You File Single While Being in a Common-law Relationship?

Filling a tax return as a common-law partner is not any different than filling one as a married couple. In both cases, the rules are the same.

So, if you file a single tax return while being in a common-law relationship, you may be found guilty of filing a fraudulent tax return. There are several consequences that you can face. Such as,

  • Receiving penalties and paying the unpaid taxes with interest
  • Your CPP benefits may be denied
  • Your pension survivor benefits might be denied

Note that this fraudulent record also remains in your profile, which might create other problems later.

Read More: Common Law Separation

What If You Become Separated from Your Partner?

A common-law relationship officially ends when the couple lives apart for at least 90 days consecutively. The CRA then calculates the amount based on the net income before the date of separation, not the whole year.

But if you get back together within 90 days, you don’t have to inform the authorities about it. And if you have a child together or have custody over a dependent, you can claim the dependency expense.

Ways to Update Your Relationship Status

So far, reading this article, you definitely understand that your relationship status is quite a crucial factor to CRA. Therefore, always keep them updated about your current situation.

And you can tell the CRA about it by the My Account service, by contacting a representative via phone, or even by sending them a mail.

To Conclude

After reading so far, you definitely get what is the penalty for filing single when you are in a common-law relationship. You see, you have to be extra careful while dealing with these matters and always be honest about the information you provide in your tax office.

A single mistake can lead to a negative consequence. So, it’s better to contact a professional if you feel like you need them.


Can you get in trouble for filing single if you are married?

Although the tax rules of Canada make every individual file their own tax returns, you need to indicate your marital status on the return. So, you can’t file single once you have married. If you do, you have to pay penalties.

How do you file taxes as common law in Canada?

Canadian tax rules do not allow common-law or spouses to file joint income tax returns. According to the law, each Canadian has to file their own tax return and show their marital status on the return. This law is different from the US and other countries.

What happens if you file the wrong filing status?

If you file the wrong filing status, you will receive penalties and have to pay the unpaid taxes with interest. Besides, there are also additional punishments that you might get later, depending on the situation. But if you provide wrong information by mistake, change it online or by mail as soon as possible.

How can I avoid marriage penalty?

Sponsorship is a legal contract with the government in Canada, and you have to meet all the terms. So, to avoid the marriage penalty, you should be careful before. Don’t marry someone you just met and whose background, as well as behaviour, is suspicious.

What is the difference between married filing separately and single?

Single is the basic filling staus for unmarried people. Married couples file separate tax returns and receive a separate tax refund. And once you get married, you can never file your tax return as single.