Navigating Your First Tax Season After Separation in Ontario
Going through a separation can feel like a whirlwind — emotionally, legally, and financially. One thing that often gets overlooked in the shuffle is how it affects your taxes. If this is your first time filing taxes after separation in Ontario, you should be aware of several key steps and changes to ensure your return is accurate and compliant.
Let’s break it down so you can approach tax season with confidence.
1. Update Your Marital Status with the CRA
Once you’ve been separated for at least 90 consecutive days due to a breakdown in the relationship, you must update your marital status with the Canada Revenue Agency (CRA). This is crucial for ensuring accurate benefit calculations and eligibility.
You can do this:
Online through CRA My Account
By phone (1-800-387-1193)
By mailing in Form RC65 - Marital Status Change
Tip: Update your status as soon as you become eligible. Delays may result in incorrect benefits or credits.
2. Filing Taxes After Separation in Ontario: What Changes?
Being separated changes your filing situation, but you still file individually — Canada does not offer joint tax returns. However, your eligibility for many benefits and credits will shift based on your new household income and dependents.
Key areas impacted include:
Childcare Expenses
You’ll also need to provide information about your ex-spouse or partner’s income for part of the year (up to your separation date).
3. Claiming Dependents and Childcare Deductions
If you have children, determining who claims what can get complicated. The CRA has specific rules on:
Who claims the eligible dependent credit
Who claims childcare expenses
How shared custody affects the CCB
If custody is shared, both parents may be eligible for 50% of the Canada Child Benefit — but this must be reported correctly.
Consider consulting a mediator or accountant to avoid double-claims or missed deductions.
4. Division of Property and Tax Implications
Separation may trigger the division of property, such as homes, RRSPs, and pensions. The good news is:
Assets can be transferred between spouses tax-free under certain conditions.
But capital gains may be triggered if assets are sold.
Keep documentation of all transfers and seek tax advice when dividing larger assets.
For more guidance, check out the CRA’s Separation and Divorce Tax Guide.
5. Keep Thorough Documentation
In the event of an audit or dispute, documentation is everything. Keep records of:
Legal separation agreements
Custody arrangements
Support payments (received or paid)
Communication with CRA regarding your status change
You’ll also want to keep your Notice of Assessment and proof of benefits updated.
6. When to Seek Professional Help
Filing taxes after separation can be complex, especially when children, support payments, or property are involved. If your situation feels overwhelming, working with a tax professional or family mediator familiar with Ontario’s tax landscape can save time, money, and stress.
Take Control of Your Financial Future
Separation is hard enough — don’t let tax season add to the chaos. With proper steps and support, filing taxes after separation in Ontario doesn’t have to be confusing or costly.
Need Help Navigating Separation and Finances?
Book a free consultation with Alliston Resolutions. An experienced family mediator can guide you through separation's financial and emotional complexities with clarity, care, and professionalism.
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