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

[ariell]

Help! I am completely confused by this.

A few months ago, I updated Canada Revenue of my change in marital status from single to married and indicated that my husband and I married in June 2008 (in India).

Today I got a letter from CRA saying that they have reviewed my entitlement for GST for July 2008 to April 2009 and that they are unable to determine if I am still entitled to the GST credit because they don't have "all of the necessary information". They want a letter that indicates my husband's net income for 2007 to determine if I am still eligible to keep the GST credit or if I have to repay it.

I just got off the phone with someone at CRA who was completely useless so I thought I would ask here. She just kept repeating the same thing like she was reading her answer out of a book. So frustrating.

Why do I have to show his 2007 net income?? We didn't marry until 2008 and he didn't come to Canada (as a PR) until the end of March 2009. He was living in India up to that point. We didn't even meet until July 2007, so what relevance is it what he made in 2007?? Do I simply write a letter stating what his income was or do I need some sort of documentation.

Any thoughts would be greatly appreciated!

 

[toby]

I think the issue is this.

If you are a single person, and earning a low income, you are entitled to a refund of at least somem of the GST tax you paid. But if your spouse is earning a high income, you don't get the GST refund. So, they want to know your husband's income.

CRA asks for your husband's 2007 income, not 2008 income, so that if he is filing his 2008 return later than you, they can make a decison on your 2008 return right away. That's my surmise, anyway.

If your husband is working outside Canada, you could state his net (taxable) income in a cover letter, or even attach a copy of his 2007 tax return or (better yet) his 2007 tax assessment.

 

[Suin]

if a spouse is a foreign citizen, what his income has to to with Canada, if he paid all the taxes in his country? something is definitely wrong here.

 

[ariell]

CRA asks for your husband's 2007 income, not 2008 income, so that if he is filing his 2008 return later than you, they can make a decison on your 2008 return right away. That's my surmise, anyway.

Well, that still doesn't make sense to me. ??? We hadn't even met until July 2007 and didn't marry until the following year, so to me, whatever he was making as a single person shouldn't even matter. And he only came to Canada in 2009 so it should only be at that point that his income is relevant for CR purposes.

Anyway, long story short.. I sent a letter explaining everything that was asked and CR still took back my GST credit (they deducted it from my 2008 return). But after several phone calls they finally admitted that I am in fact entitled to the credit and will be returning it to me with interest in January. Let's see if that actually happens......

 

[Suin]

good news, ariell. please keep us informed.

 

[toby]

This is one more example of how the bureaucracy can mess up a simple idea. The idea is that if you are a low-income person, you get a rebate of some of the GST you paid. But if you have a spouse earning enough to cumulatively put you above a certain threshhold, then you don't get the rebate.

Logistically they ask you for your spouse's worldwide income for the previous year because to get that figure for the current tax year might cause you to delay filing your tax return in Canada. The bureaucratic box (they have to pass a course on how to never see outside the tunnel) does not allow them to take into account that for that one year your spouse was NOT your spouse the year before.

However, if he HAD been your spouse the year before, but not yet a resident of Canada, that would not have mattered. In this matter they are not interested in the taxes he paid in Canada; they care about how much financing you had as a couple, and (again) if it is high enough, you don't get the GST rebate.

Trying to explain that to an official paid peanuts to answer the telephone can be frustrating, I know. As my mother used to say when I got frustrated at such things, "if they were as smart as you they would not be doing that job!" I suspected a certain sarcasm at times, but that's a different point.

 

[louieong]

Hello, after reading all your post.

Is it safe to say, that one should not change your status till you file for your income tax 2011?

eg:

1) Married 2009, in the Philippines

2) Wife arrived Toronto July 2010

3) Then change status from single to married on income tax filling 2011?

;D

 

[Stumpedmom]

I am going thru all this now, in Ontario you now get the Ontario Sales Tax Transition Benefit (HST). I got a letter from CRA stating that they received my marital status change (married July 2010) and they needed further information. I called in back in September to clarify the letter because it didn't specify what information they needed. I was advised at that time that because my husband is a non resident, nothing would be affected until he moved here. I have now been informed that this transition benefit can not be figured out without the worldwide income. This is the ONLY benefit that is affected by his income, until he moves here and becomes a PR or comes on a working visa.

Thats my experience...

 

[jordankevin47]

Hello,

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Happy Reading, and do the Canadian thing and share this book with everyone you know.

kevin Jordan.

 

[yycsilverback]

Well, that still doesn't make sense to me. ??? We hadn't even met until July 2007 and didn't marry until the following year, so to me, whatever he was making as a single person shouldn't even matter. And he only came to Canada in 2009 so it should only be at that point that his income is relevant for CR purposes.

Anyway, long story short.. I sent a letter explaining everything that was asked and CR still took back my GST credit (they deducted it from my 2008 return). But after several phone calls they finally admitted that I am in fact entitled to the credit and will be returning it to me with interest in January. Let's see if that actually happens......

Did you end up getting that return? Had a very similar experience recently, called several times and the agents were useless tits - kept repeating the same sentence, like I don't understand what they are saying. We got married in year X and didn't live together before, now they are trying to take back my GST credits from year X-2 (2 years back) because my partner has not filed taxes? My or my partner's X-2 income (and the resulting calculation of X-2 GST/HST credits) did not change based on us getting married in X. But they request that X-2 info to do a recalculation?

This sounds pretty retarded, anyone have any insight or advice? Am I missing something?

 

[pie_vancouver]

^Your X and X-2 are confusing, can you post the actual date of marriage and what CRA is trying to get back.

You really dig this forum, this thread is 6years old

 

[steaky]

Probably CRA reassess yysilver's tax return and take back the GST credit for the year X-2. Better to get an accountant to sort it out.

 

[canuck_in_uk]

Did you end up getting that return? Had a very similar experience recently, called several times and the agents were useless tits - kept repeating the same sentence, like I don't understand what they are saying. We got married in year X and didn't live together before, now they are trying to take back my GST credits from year X-2 (2 years back) because my partner has not filed taxes? My or my partner's X-2 income (and the resulting calculation of X-2 GST/HST credits) did not change based on us getting married in X. But they request that X-2 info to do a recalculation?

This sounds pretty retarded, anyone have any insight or advice? Am I missing something?

GST credits are based on family income and are determined by income from the tax year, Jan-Dec, that is immediately previous to the credit year, which runs July-June.

I'm going to say you got married in March 2016. The GST credit you were receiving at the time (the July 2015-June 2016 credit year) was based on your 2014 income. As it is based on family income, CRA needs your husband's income from the qualifying year of 2014 to recalculate your GST credit for after March 2016.

CRA is not going to take your GST credit from before you married but unless your husband had little to no 2014 income, you are likely to have to pay back what you received after.

 

[yycsilverback]

GST credits are based on family income and are determined by income from the tax year, Jan-Dec, that is immediately previous to the credit year, which runs July-June.

I'm going to say you got married in March 2016. The GST credit you were receiving at the time (the July 2015-June 2016 credit year) was based on your 2014 income. As it is based on family income, CRA needs your husband's income from the qualifying year of 2014 to recalculate your GST credit for after March 2016.

CRA is not going to take your GST credit from before you married but unless your husband had little to no 2014 income, you are likely to have to pay back what you received after.

@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?

 

[pie_vancouver]

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.