Tax Checklist After Divorce in Ontario

The CRA does not know you are separated or divorced until you tell them. And if you tell them late, they will retroactively recalculate your benefits — which can mean either a welcome increase or a clawback of thousands of dollars you have already spent.

Here is every tax-related step, in order, with the forms and deadlines that matter.

1. Notify the CRA of Your Marital Status Change (Form RC65)

Deadline: By the end of the month following 90 consecutive days of separation.

If you separated on January 15, the 90-day mark is April 15. You must file Form RC65 by April 30.

You can file Form RC65:

• Online through My Account on the CRA website
• By mail to your tax centre

What happens when you file:

• The CRA updates your status to "separated" or "divorced"
• They retroactively recalculate your Canada Child Benefit (CCB) and GST/HST credit back to the first day of separation
• If you are the primary caregiver, your CCB payments may increase (calculated on your individual income rather than household income)
• If both parents were sharing the CCB, the CRA will redirect payments to the primary caregiver

Missing this deadline can trigger a clawback. If the CRA discovers the status change during a later audit, they will demand repayment of any overpaid benefits — with interest.

2. Canada Child Benefit (CCB) Recalculation

After you file Form RC65, the CRA automatically recalculates CCB based on your individual net income rather than combined household income. For the lower-earning spouse, this often means a significant increase.

If you share custody (roughly 50/50), both parents can receive CCB. Each parent receives 50% of the amount calculated based on their individual income. To set this up, both parents need to file Form RC65 and indicate shared custody.

3. GST/HST Credit Adjustment

The GST/HST credit is also recalculated based on individual income after separation. If your individual income is lower than the household income was, your quarterly credit payments will increase.

This adjustment happens automatically after you file Form RC65 — no separate application needed.

4. Tax-Free RRSP and RRIF Transfers (Form T2220)

If your separation agreement requires one spouse to transfer RRSP or RRIF funds to the other, this can be done tax-free using CRA Form T2220 (Transfer from an RRSP, RRIF, SPP, or PRPP on Relationship Breakdown).

Critical rules:

• The transfer must be directly between financial institutions — if you withdraw the funds and pay your spouse yourself, it is a taxable withdrawal and you lose the contribution room permanently
• Both spouses' financial institutions must be named on the form
• A copy of the signed separation agreement or court order must accompany the form
• There is no deadline, but the transfer must be completed in the tax year you want the tax-free treatment to apply

5. TFSA and FHSA Transfers

TFSA transfers between spouses under a separation agreement do not affect either spouse's contribution room — but only if executed as a direct transfer between institutions.

FHSA transfers use CRA Form RC723. The same direct-transfer rule applies. If the transferring spouse has an "excess FHSA amount," tax consequences may apply.

6. Spousal Support Tax Treatment

Spousal support payments have specific tax treatment:

• The paying spouse can deduct periodic spousal support from their taxable income
• The receiving spouse must report it as income

This only applies to periodic payments ordered by a court or specified in a written separation agreement. Lump-sum payments are generally not deductible.

Child support is different — it is not deductible by the payer and not taxable for the recipient.

7. First Tax Filing After Separation

Your first tax return after separation requires careful attention:

• File as "separated" (not "married") if you have been apart for 90+ days by December 31
• Report only your individual income
• Claim dependants based on who the primary caregiver is
• Update your direct deposit information if it was linked to a joint account

If you were the lower-earning spouse and your ex handled tax filings, consider working with a tax preparer for the first year to ensure everything is filed correctly.

Common Mistakes

Filing Form RC65 late. The CRA will retroactively adjust benefits, and overpayments become debts with interest.

Withdrawing RRSP funds instead of transferring. Without Form T2220, a withdrawal triggers income tax on the full amount and permanently destroys the contribution room.

Forgetting the TFSA. TFSA transfers without proper documentation can be treated as withdrawals and re-contributions, potentially triggering over-contribution penalties.

Tax obligations are just one track of the post-divorce administrative process. The Ontario After-Divorce Checklist covers every step — financial, legal, and identity — in the correct order.

See more Ontario guides →