Help! I Was Claimed as a Dependent on Someone Else’s Taxes
Do you suspect you’ve been claimed as a dependent on someone else’s taxes in Canada? Unfortunately, scenarios like this are not uncommon. The eligibility criteria for being a dependent is often overlooked, causing people to either mistakenly, or sometimes purposefully, wrongly claim someone as a dependent on their taxes. If you believe you’ve been wrongly claimed as a dependent on someone’s taxes, here’s what you should do.
How to Know If You Were Claimed as a Dependent on Someone Else’s Taxes in Canada
If you try to file your taxes on your own after being claimed as someone else’s dependent, the CRA will reject your tax refund. You may need to reach out to the CRA directly to find out the reason for rejection. The CRA will detect that the information in your tax return is inconsistent with the tax return in which you were claimed as a dependent. They will also flag that your social security number was already listed in another tax return.
What Happens When Claimed as a Dependent
When someone claims you as a dependent on their tax return, any taxes owed to you or owed by you now belong to whoever claimed you. This will also qualify them for any benefits or credits related to having a dependent, such as the eligible dependent tax credit.
How to Know if You Were Wrongly Claimed as a Dependent
Financial Independence: If you supported yourself and earned income, you likely don't qualify as a dependent.
Living Situation: Many dependent claims require you to have lived with the claimant for at least part of the year.
Excess Income: In Canada, some dependent credits have specific income thresholds. If your income exceeds that limit, you cannot be claimed.
Mistakes: Sometimes, people use tax software that auto-fills information from the previous year or simply misunderstand the rules.
Fraudulent Claims: In some cases, an individual might knowingly claim you to reduce their own tax bill, even if you don't qualify.
What to Do If You Were Claimed as a Dependent on Someone Else’s Taxes
Here’s the steps you should follow if you were wrongly claimed as a dependent on someone else’s tax return:
Contact the CRA: Reach out to the CRA directly to explain the situation as soon as possible, as issues like these are highly time-sensitive. The CRA will be able to provide clarity into whether you can qualify as their dependent. If not, the CRA will likely ask you to provide evidence that you’re not a dependent.
Gather Proof: You’ll need to provide evidence that you’re not a dependent. Good examples of evidence include: proof of income (ex. T4 or previous tax returns) or proof of your living situation (ex. A rental agreement, utility bills.etc).
Hire a Tax Professional: The best way to make sure the issue is resolved quickly is to hire a tax professional. A Kitchener-Waterloo tax professional like GRFS will have a full understanding of Canada’s tax rules and how to appeal a dispute with your tax return. They’ll also communicate with and provide proof to the CRA on your behalf, making sure you have a strong case to get the issue dealt with swiftly.
Kitchener-Waterloo’s Locally Trusted Tax Professionals: GRFS
At Grand River Financial Solutions, we deal with complex tax situations like this all the time. We can help you navigate the murky waters of Canada’s tax world, ensuring your taxes are filed correctly and tax-efficiently year by year.
Our goal is to ensure you keep as much money in your pocket as possible, while also complying with the CRA’s strict tax rules.