HELP! GST re-evaluation after reporting change in marital status to CRA

[yycsilverback]

They have a way to check, 2014 income was just the basis for July 2015 to June 2016 credit, they pulled your spouse income and recalculated as the status changed to married, your income is now combined for calculations of credit and was reduced after March 2016. Either you pay back or they will just reduce your tax refund next year.

But... why is our 2014 income combined for the purpose of calculating GST/HST credits? We were not legally a couple back then.
Does this mean that anyone that gets married and now has significant family income gets no credits for the previous year, when they were single?

I can understand that we would get reduced or no GST credits when they calculate them for base year 2016 onward (credit period July 2017-June 2018), since that's when we got married and our combined total income would be higher.

 

[pie_vancouver]

Doesn't matter if you were single in 2014, the payment credit as of March 2016 has changed. It happened to me too, i got married and had to pay back my credit received.

 

[scylla]

But... why is our 2014 income combined for the purpose of calculating GST/HST credits? We were not legally a couple back then.
Does this mean that anyone that gets married and now has significant family income gets no credits for the previous year, when they were single?

I can understand that we would get reduced or no GST credits when they calculate them for base year 2016 onward (credit period July 2017-June 2018), since that's when we got married and our combined total income would be higher.

You're misunderstanding how the base works vs. the time you changed from being single to married. The base is just the base for calculating the credits. It's not what determines if you fall under the single or married category - for that, they obviously look at your current status. CRA is correct in requesting money returned.

 

[yycsilverback]

You're misunderstanding how the base works vs. the time you changed from being single to married. The base is just the base for calculating the credits. It's not what determines if you fall under the single or married category - for that, they obviously look at your current status. CRA is correct in requesting money returned.

I'm not misunderstanding, just disagree with the (lack of) logic. They are saying because I got married in 2016 I am not eligible for GST credits, which are calculated based on income in 2014.

"You got married in March 2016, you're not eligible for credits calculated for your income in 2014 and paid out after March 2016"
Does noone else see a problem with logic in this statement?

 

[scylla]

I'm not misunderstanding, just disagree with the (lack of) logic. They are saying because I got married in 2016 I am not eligible for GST credits, which are calculated based on income in 2014.

"You got married in March 2016, you're not eligible for credits calculated for your income in 2014 and paid out after March 2016"
Does noone else see a problem with logic this statement?

I think you're still misunderstanding. You're not missing out on some sort of credit you've accumulated based on your 2014 income. The 2016 payout is based on your 2014 income (meaning - that's how it's calculated - CRA has to calculate the GST/HST income somehow and they go back two years to do this). As soon as you get married, you start being evaluated as a married couple. This is completely logical and I'm not sure where the confusion is. I think you're hung up on the 2014 bit and mistakenly think there's some sort of back credit you're not getting (which isn't the case). Your 2014 income is just used for the calculation - that's all. It's like saying that I used the gas price from two days ago to calculate how much tax I'm going to pay on gas I buy today.

 

[yycsilverback]

I think you're still misunderstanding. You're not missing out on some sort of credit you've accumulated based on your 2014 income. The 2016 payout is based on your 2014 income (meaning - that's how it's calculated - CRA has to calculate the GST/HST income somehow and they go back two years to do this). As soon as you get married, you start being evaluated as a married couple. This is completely logical and I'm not sure where the confusion is. I think you're hung up on the 2014 bit and mistakenly think there's some sort of back credit you're not getting (which isn't the case). Your 2014 income is just used for the calculation - that's all. It's like saying that I used the gas price from two days ago to calculate how much tax I'm going to pay on gas I buy today.

Not really. It's like them saying: "I see you were poor 2 days ago, here's a little money to offset the cost of gas you buy today."
Then I say I got married 1 day ago and they say: "Yeah, about that money we gave you, I see your partner has money too - can you pay it back?"
This does not change the fact I was poor 2 days ago - and that's why you gave me the credit.
Now they're saying: "You are not poor 2 days ago anymore, because you married yesterday". That's just ridiculous.

 

[pie_vancouver]

"You got married in March 2016, you're not eligible for credits calculated for your income in 2014 and paid out after March 2016"
Does noone else see a problem with logic in this statement?

You are still eligible, you and your spouse will receive one instead of two as this credit is per household, depending on the base income because it's combined the higher the income the less credit or sometimes zero.

When you got married (or people in common law rel.) the cost of living are now shared by two people that's why this credit was recalculated unlike single people all expenses are shouldered by one.

 

[canuck_in_uk]

@cannuck_in_uk:
Correct - I got married in March 2016 They paid me some GST/HST credits after March 2016, based on my 2014 & 2015 tax report. Now the CRA sent me a letter/message saying that I need to pay those exact credits back (base year 2014 and 2015). But if the base year is 2014, when we weren't married, why does this calculation change retroactively, based on what my spouse was making as a single person in 2014/2015? We were not sharing income or household in 2014/2015, we didn't have a family income. This translates into not getting credits based on my 2014 & 2015 income because I got married in 2016. How is that a correct calculation?

Good guess on my part .

As said above, using previous tax years is simply how CRA calculates the credit a person receives. They can't calculate the credit based on your current income. As of March 2016, you were married, so credits received after that needed to factor in your spouse's income for the calculation year.

 

[picklee]

I'm not misunderstanding, just disagree with the (lack of) logic. They are saying because I got married in 2016 I am not eligible for GST credits, which are calculated based on income in 2014.

"You got married in March 2016, you're not eligible for credits calculated for your income in 2014 and paid out after March 2016"
Does noone else see a problem with logic in this statement?

The logic is that it is fair. Firstly, it prevents two married people from claiming the GST/HST credit as individuals. Secondly, the GST/HST credit is a progressive tax credit that is meant to be targeted at low income households.

You were never entitled to receive (as much of) the credit after March 2016 because your combined household income exceeded the cut off. Were you poor in 2014 and 2015? Sure, and you probably received the tax credit during the respective tax years, 2015 and 2016.

When your status changed in 2016, your entitlement was recalculated because the combined income of you and our spouse after March 2016 was more than what you made by yourself. It’s completely logical to use the previous year’s income to do tax calculations for the current year. In this case, the credit year runs July-June and your status changed near the end of that period, so they had to go all the way back basically two years to recalculate your entitlement.

It’s not like they are asking you to repay the credits from July 2015 to March 2016. Your GST/HST credit would have been recalculated anyway 3 months after you got married.

 

[yycsilverback]

Good guess on my part .

As said above, using previous tax years is simply how CRA calculates the credit a person receives. They can't calculate the credit based on your current income. As of March 2016, you were married, so credits received after that needed to factor in your spouse's income for the calculation year.

I understand why they do it, they have no info for current year. Just disagree with the logic - if you decided to pay me some credits today based on what my finances as a single person were in the past, don't take them back based on what my current spouse's finances were as a single person.

 

[pie_vancouver]

^Did they take your spouse's credit as well?

 

[yycsilverback]

^Did they take your spouse's credit as well?

She didn't file yet, late on taxes.