Common Law in Canada recognized in America?

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king256
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Common Law in Canada recognized in America?

Post by king256 » Mon Jan 28, 2019 4:16 pm

Hello, I am in a Common-Law relationship with my partner in Canada, BC. For US tax purposes, is this considered married? I can not figure this out.
In Canada, we are considered Common Law for tax purposes (not married, we tick common law.) I was reading the definition of "Married" on the IRS website. I'll quote here:

"Married persons.
You are married for the whole year if you are separated but you haven’t obtained a final decree of divorce or separate maintenance by the last day of your tax year. An interlocutory decree isn’t a final decree. However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that isn’t called a marriage under state (or foreign) law aren’t married for federal tax purposes. For more information, see Pub. 501." https://www.irs.gov/publications/p504#e ... 1000175821

Since a Common Law Partnership is different from marriage, is it safe to file as "Single" for my US tax return?

nelsona
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Re: Common Law in Canada recognized in America?

Post by nelsona » Mon Jan 28, 2019 4:43 pm

I don't think there is any province that recognizes common law relationship as "Marriage" in the way IRS is asking. BC still has a distinction. There are some US states that do equate the two (which is probably why that wording is in the IRS definition).
So, in my opinion you can (or must) file as single.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

king256
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Re: Common Law in Canada recognized in America?

Post by king256 » Mon Jan 28, 2019 4:51 pm

viewtopic.php?t=8894

I read this on the forum earlier, so you still think I must be Single? that's how it seems to me, just want to confirm

nelsona
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Re: Common Law in Canada recognized in America?

Post by nelsona » Mon Jan 28, 2019 5:35 pm

Yes.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

king256
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Re: Common Law in Canada recognized in America?

Post by king256 » Mon Jan 28, 2019 5:45 pm

Thank you for the help

Mark T Serbinski CA CPA
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Re: Common Law in Canada recognized in America?

Post by Mark T Serbinski CA CPA » Tue Jan 29, 2019 10:43 am

The Internal Revenue Service has upheld the notion that common law marriages are recognized for purposes of filing a joint return (for over 50 years).

In Revenue Ruling 58-66 the Service says:

"In Revenue Ruling 58-66, the Service stated that a couple would be treated as married for purposes of Federal income tax filing status and personal exemptions if the couple entered into a common-law marriage in a state that recognizes that relationship as a valid marriage.
The Service further concluded in Revenue Ruling 58-66 that its position with respect to a common-law marriage also applies to a couple who entered into a common-law marriage in a state that recognized such relationships and who later moved to a state in which a ceremony is required to establish the marital relationship. The Service therefore held that a taxpayer who enters into a common-law marriage in a state that recognizes such marriages shall, for purposes of Federal income tax filing status and personal exemptions, be considered married notwithstanding that the taxpayer and the taxpayer’s spouse are currently domiciled in a state that requires a ceremony to establish the marital relationship. Accordingly, the Service held in Revenue Ruling 58-66 that such individuals can file joint income tax returns under section 6013 of the Internal Revenue Code (Code)."


For "state" I would include foreign jurisdictions. The full reference is found here:
https://www.irs.gov/pub/irs-drop/rr-13-17.pdf

However, you should note that declaring oneself as "married" also brings with it other conditions, such as the inability to file as "Head of Household" or the requirement to file "Married filing separately" if filing a separate return. Each of these can be less attractive.
Mark

nelsona
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Re: Common Law in Canada recognized in America?

Post by nelsona » Tue Jan 29, 2019 10:51 am

The Key is "in a state that recognizes that relationship as a valid marriage"
Currently only a few states, and no province to my knowledge recognizes common law as a "valid marriage".
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

king256
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Re: Common Law in Canada recognized in America?

Post by king256 » Wed Jan 30, 2019 5:51 am

Well BC does consider your common law partner your spouse under the Family Law act, (Must live together 2 years in a marriage like relationship) but, even though they are treated the same, BC seems to not equate Common Law to be the same as marriage, just get the same treatment.

Another question to branch off this then since it seems I need to file as Single, would their prove to be any problems having "Common Law" ticked on my Canada return, and "Single" on my US return?

king256
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Joined: Mon Jan 28, 2019 4:08 pm

Re: Common Law in Canada recognized in America?

Post by king256 » Wed Jan 30, 2019 6:33 am

To add, on the Legal Services society website, it says unmarried spouses who live together never become legally married.

king256
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Re: Common Law in Canada recognized in America?

Post by king256 » Wed Jan 30, 2019 2:24 pm

Sorry, I do not now how to edit a post but, since I'd be considered as "Single" in the US, would I face problems having Common Law ticked in Canada return and Single ticked in US return? Since BC doesn't equate Common Law as marriage

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