What is the spousal dividend transfer?
The Income Tax Act has a rule that allows you (the higher-income partner) to report all the dividends your partner received from taxable Canadian corporations if by including the dividends in your income (instead of in theirs) you will be able to increase your claim (or claim an amount) on line 303. In SimpleTax we call this the spousal dividend transfer.
In our 2013 and 2014 versions we do not apply the spousal dividend transfer automatically. If you would like to report your income this way, report all dividends on the higher income person’s returns and no dividends on the lower income person’s return. Ensure you are able to claim this credit (e.g., the higher income person still has an amount on line 303) before filing this way.
We apply the spousal dividend transfer for you automatically.
Report your dividends on your return and your partner’s dividends on their return. When you click Check & Optimize we’ll figure out whether you should claim the transfer (and apply it automatically if you should).
If we apply the spousal dividend transfer to your return, you’ll see this row in the Optimization Results table.
In the Summary section, you’ll notice that you’ll claim a higher amount on lines 120/180 and your partner will claim nothing on those lines.
- Sometimes the box can be checked off but the transfer isn’t applied to your returns. This means that you’ve changed something else on your return that made you ineligible for the transfer. This will be fixed when you run the optimizer.
- Or, you might not see the box but the transfer is being applied to your return. This usually only happens when you change the suggested split pension amount. If you refresh the page the row should appear.