Canada Child Tax Benefit (CCTB) vs. Marital Status Change

Program(s) affected: T1 Document created: 10 24, 2012 Tax year(s): 2011 Document last modified: Version(s): 15.01, 15.02, 15.10, 15.11, 15.14, 15.15, 15.20, 15.30, 15.31 Problem status: N/A

How can the administrative changes of the 2011 federal budget, with respect to the Canada Child Tax Benefit (CCTB), have a negative impact on my clients?

According to the 2011 budgetary measures, a change of marital status requires CCTB recipients to notify the CRA before the end of the month after the month that the change in status occurred in order to calculate future CCTB payments taking into consideration the income of both spouses, or both common-law partners. Prior to these changes, the inclusion of income took place only after the benefit year (July to June) elapsed. The premature application of this rule change may result in an understatement of CCTB for taxpayers who changed marital status before June 30, 2011.

Please apply the following filter searching for the StatusChange keyword to obtain a list of all the clients who may have been adversely affected by this new measure:

In the tax year 2011, from the client list, select Filter the client list from the Tools menu. Select any of the customizable filters and click on the Edit filter button. Designate the filter using a name such as "2011 marital status changes vs. CCTB". Then, in the field below Keywords, replace the "*" by the word "StatusChange" and select the OK button. Finally, select the Apply filter button. At that moment, your client list should display all your clients that underwent a status change of any kind during 2011. From that list, you should be able to locate more easily your clients that underwent a marital status change that could be adversely affected by the CRA's aforementioned mistake.

Finally, the procedure to correct this situation, as described by the CRA in a news release, is the following:

To rectify this situation, individuals who received CCTB payments in 2011 and incurred a change in their marital status during the period of January 1st to June 30th, 2011 may advise the CRA of the actual date of the marital status change by:

• using "Change my marital status" on My Account on the CRA Web site,
• completing and sending form RC65, Marital Status Change,
• calling at 1-800-387-1193, or by
• notifying/informing the CRA in writing.

By providing the actual date of the marital status change, the CRA will be able to properly calculate the CCTB payments for base year 2010 (payments made from July 2011 to June 2012).

For more information, see CRA's Questions and answers about Marital status.

Important update (10/31/2012): We have been informed that the CRA will send a letter to all the CCTB recipients who have reported a marital status change with the filing of their 2011 income tax and benefit return.