Subject: Child Tax Credit and the Equivalent-to-Married Tax credit
This is in reply to your memorandum of June 17,1991 in which you asked us to consider two situations involving the above-noted tax credits.
24(1)
As support for this position, you have referred to paragraph 17 of Information Circular 80-3R2 entitled "Child Tax Credit" which indicates that a spouse is still considered to have resided with the claimant at December 31 if separated only for business, employment, medical or educational reasons.
Our Comments
With respect to the first situation, the child tax credit available to an individual for an eligible child is reduced by 5% of the amount by which the individual's income for the year together with the income of all other supporting persons exceeds a certain threshold level. The definition of "supporting person" in paragraph 122.2(2) (b) includes the spouse of the individual where the individual was married and resided with his spouse at the end of the year.
In the situation where an individual's husband is 24(1) overseas, we believe that he should be considered to reside with his spouse unless he can establish otherwise. We would be pleased to consider an actual case if all the relevant facts were to be provided to us. You may also wish to refer to Interpretation Bulletin IT-221R, "Determination of Individual's Residence in Canada".
If it was established that the husband did not live with the spouse and did not support her, the spouse would be entitled to claim the equivalent-to-married tax credit provided that the other requirements of paragraph 118(1)(b) are satisfied.
We note that, in the absence of a marriage breakdown, the normal assumption is that the husband and wife are living together and there is mutual support.
In the second situation, we agree that the husband "resided" with his spouse for the purposes of subparagraph 122.2(2)(b)(i) unless he can show that he did not regularly, normally, or customarily reside in the same dwelling as his spouse.
We hope that the above comments are of assistance to you.
DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch