He could possibly file beneath the Voluntary Disclosures Program (VDP). In keeping with the Canada Income Company (CRA), “the VDP grants reduction on a case-by-case foundation to taxpayers and registrants who voluntarily come ahead to repair errors or omissions of their tax filings earlier than the [CRA] is aware of or contacts them about it.”
In case your boyfriend owes tax, he’ll nonetheless must pay it, however the late-filing penalties, and a few or the entire curiosity, could also be waived.
In the event you dwell collectively, you’re in all probability thought of common-law by the CRA, Alison. That’s as a result of the company’s definition of common-law consists of companions dwelling collectively in a marital relationship for at the very least 12 consecutive months. Within the 12 months you hit that 12-month mark, you must file your tax return as common-law. And you must notify the CRA by the tip of the month following the month your standing modified.
Widespread-law tax advantages
Listed here are a few of the impacts of submitting as common-law spouses:
- Eligibility for some authorities advantages relies on household earnings as an alternative of particular person earnings
- Widespread-law spouses can mix medical bills and donations and will obtain a bigger mixed tax financial savings than when submitting as single people
- If their earnings was low, companions can declare a tax credit score referred to as the partner or common-law associate quantity
- Spouses can contribute to a spousal RRSP
- Spouses can break up eligible pension earnings
In your case, Alison, your boyfriend’s low earnings in 2020 and no earnings since then could entitle you to assert the above-mentioned partner or common-law associate quantity as a tax credit score. The financial savings for 2024 are as much as $2,356 federally and between $532 and $2,189 provincially relying on the place you reside.
Nevertheless, if you’re receiving advantages just like the Canada Youngster Profit, GST/HST credit score, Canada Carbon Rebate (previously referred to as local weather lively incentive funds), or Assured Earnings Complement (GIS), there could also be a change in these advantages for those who replace your submitting standing to common-law.
Why to get caught up in your taxes
Finally, your boyfriend might want to get his taxes sorted and updated, Alison. It’s higher to take action voluntarily, versus having the CRA assess massive penalties and curiosity. In case your boyfriend lives with you and is supported by you, his monetary state of affairs has a direct influence on yours. It additionally has an oblique influence to your tax return and authorities advantages.
While you file your tax return, you certify that the knowledge given in your return is right, full and totally discloses your entire earnings. As such, you must file your tax return precisely, Alison, regardless of your boyfriend being behind on his personal returns.
