10 July 2025 Internal T.I. 2024-1030661I7 - DTC & Separated spouses in the absence of divorce

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether a supporting person (the taxpayer) would be eligible to claim a disability tax credit (DTC) transfer from a DTC-eligible person with a disability (“PWD”), even though the taxpayer and the PWD’s mother are separated due to a breakdown of their marriage.

Position: Yes.

Reasons: Given that marriage is not dissolved by mere separation, the separated parties are still considered to be spouses for purposes of the Act, and the PWD is considered a child of the taxpayer’s spouse.

										July 10, 2025

      Kelly Mahaney							HEADQUARTERS
      Legislation Section						Income Tax Rulings Directorate
      Benefit Partnerships and Services Division
      Benefit Programs Directorate					Randa El-Kadi
      Assessment, Benefit and Service Branch			 

										2024-103066							

Separation due to marriage breakdown and transfer of the disability tax credit

We are writing in response to your correspondence of July 29, 2024, regarding eligibility for the disability tax credit (DTC) transfer under subsection 118.3(2) of the Income Tax Act (the Act). More specifically, you ask whether a taxpayer would be eligible to claim a transfer of the DTC from a DTC-eligible person with a disability (PWD) even though the taxpayer no longer resides with either of the PWD or the PWD’s mother.

In this scenario, you provide that the taxpayer and the PWD’s biological mother were married but have been living separate and apart since 2015 due to a breakdown of their marriage. You specify that they have not divorced. You also explain that the taxpayer is not the biological father of the PWD, but lived with the PWD and the PWD’s mother from the time the PWD was three years old until the couple separated. The PWD is now over 18 years of age. The taxpayer still financially supports the PWD and his mother who both live in a home the taxpayer owns. The taxpayer also pays for a number of their expenses. You ask whether the taxpayer could claim a DTC transfer from the PWD in this scenario.

In your view, two married individuals are considered to be spouses for purposes of the Act until they are divorced. Therefore, it is your view that the PWD is the child of the taxpayer’s spouse, and the taxpayer would be eligible to claim a transfer of the DTC from the PWD, assuming all other eligibility requirements related to the transfer are met.

Our comments

Subsection 118.3(2) of the Act provides the criteria for determining the entitlement of a supporting individual to claim a person’s unused portion of the disability amount. Generally, the DTC transfer to a supporting individual is allowed if the supporting individual claimed the eligible dependant credit (EDC) – under paragraph 118(1)(b) of the Act – or the Canada caregiver credit (CCC) – under paragraph 118(1)(d) of the Act – in respect of the PWD for the tax year.

The EDC is generally available in respect of an eligible dependant who resides in a home with, and who is wholly dependent for support on, the individual who maintained the home in the year, and is either a child under the age of 18 or dependent by reason of mental or physical infirmity. In the present case, it appears that the taxpayer is not entitled to claim an EDC in respect of the PWD as they do not live together, and the PWD is not wholly dependent for support on the taxpayer.

The CCC is generally available in respect of each dependant of the individual, who is 18 years of age or older and dependent on the individual because of a mental or physical infirmity. For purposes of the CCC, a “dependant” is defined in subsection 118(6) of the Act, and “means a person who at any time in the year is dependent on the individual for support” and is one of certain relations to the individual, which includes a child of the individual or of the individual’s spouse or common-law partner. It is of note that for the purposes of the CCC, the person being supported does not need to live with or be exclusively reliant upon the individual for support.

We agree with your view that in the absence of divorce or annulment, the taxpayer and the PWD’s mother are spouses for purposes of the Act, and that the PWD is a child of the taxpayer’s spouse. It is our view that, unless specifically provided for otherwise, parties to a marriage are considered to be spouses for purposes of the Act throughout the period of their separation, regardless of whether they are living separate and apart because of a breakdown of their marriage. In addition, it appears that the PWD is dependent for support on the taxpayer as the taxpayer is providing accommodations and pays for a number of the expenses of the PWD.

As such, it is our view that the taxpayer would not be precluded from claiming a DTC transfer from the PWD on the sole basis that the taxpayer and his spouse have been living separate and apart due to a breakdown of their marriage.

It is worth noting that the determination of whether the taxpayer and the PWD’s mother are considered to be spouses under the Act, and whether the PWD is a child of the taxpayer’s spouse is not the only requirement of whether a DTC can be transferred. All factors, such as the limitations under paragraph 118.3(2)(b) and subsections 118(4) and 118(5) of the Act, would need to be considered in determining whether the taxpayer may claim a DTC transfer from the PWD.

For example, if the PWD’s mother were to claim an EDC in respect of the PWD for a given tax year, the taxpayer would be precluded (pursuant to paragraphs 118(4)(c) of the Act) from claiming the CCC and the DTC transfer from the PWD for that year. The same would be true if the taxpayer was required to pay a support amount (as defined in subsection 56.1(4) of the Act) to his spouse in respect of the PWD.

Unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency’s electronic library. After a 90-day waiting period, a severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. You may request an extension of this 90-day period. The severing process removes all content that is not subject to disclosure, including information that could reveal the identity of the taxpayer. The taxpayer may ask for a version that has been severed using the Privacy Act criteria, which does not remove taxpayer identity. You can request this by e-mailing us at: ITRACCESSG@cra-arc.gc.ca. A copy will be sent to you for delivery to the taxpayer.

We trust our comments will be of assistance.

Eric Wirag, CPA, CMA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch