Principal Issues: [TaxInterpretations translation] Are the requirements of subparagraph 118(1)(b)(i), with respect to Ms. X, satisfied for the 2008 taxation year?
Position: Yes.
Reasons: Ms. X did not claim the wholly dependent person credit for her 2008 taxation year under paragraph 118(1)(a), and at some point in 2008, Ms. X did not live with her spouse or common-law partner.
December 1, 2009
Jonquière Tax Services Office Headquarters T1 Client Services Business and Partnerships Division Attention: Caroline Labrecque André Gallant
2009-034415
Paragraph 118(1)(b) – Wholly dependent person credit
This is in response to your email of October 14, 2009 in which you asked for our opinion on the above subject regarding the situation described below.
Unless otherwise indicated, all statutory references herein are to the provisions of the Income Tax Act (the "Act").
More specifically, you described a situation where Ms. X has been living apart from Mr. Y since 2005. They had a child together, with Ms. X having full custody and not paying child support. The child is currently under the age of 18. Ms. X then moved in with Mr. Z in XXXXXXXXXX 2007, and became Mr. Z's common-law partner in XXXXXXXXXX 2008. Ms. X did not claim the married or common-law partner credit under paragraph 118(1)(a) because Mr. Z had a high income in 2008.
You wish to know if Ms. X can claim the wholly dependent person credit under paragraph 118(1)(b) for her 2008 taxation year. In particular, you are concerned about the requirements under subparagraph 118(1)(b)(i).
Our Comments
An individual claiming the deduction under paragraph 118(1)(b) must satisfy various conditions. For the purposes of your situation, we will limit our comments to two of these conditions and have assumed that all others are satisfied.
The first of these conditions requires that the individual not claim a deduction for the year because of paragraph 118(1)(a). In your situation, Ms. X did not claim this paragraph 118(1)(a) deduction in 2008. While the old version of paragraph (b) required that the individual be "not entitled to a deduction by reason of paragraph (a)" in order to be entitled to a deduction under paragraph (b), the current version of paragraph (b) only requires that the individual not have claimed the deduction under paragraph (a).
In other words, the question to be asked for paragraph 118(1)(b) is not whether Ms. X could claim the deduction in paragraph (a), but whether the deduction in paragraph (a) was claimed by Ms. X.
The second condition that merits particular attention is whether, "at any time in the year", the individual is not living with his or her spouse or common-law partner under subparagraph 118(1)(b)(i). In this case, Ms. X satisfies this test because she did not live with her spouse or common-law partner at a particular time in 2008 (i.e., from XXXXXXXXXX 2008 to XXXXXXXX 2008).
Based on the information you have submitted to us, we are therefore of the view that the requirements of subparagraph 118(1)(b)(i), as it relates to Ms. X, are satisfied.
Access to Information
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act conditions and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
We hope that you find these comments of assistance. If you have any questions regarding this request, please do not hesitate to contact us.
François Bordeleau, Advocate
Manager
Business and Partnerships Section
Income Tax Rulings Directorate.