Tax Filing Considerations for a Surviving Spouse in Ontario

When a spouse or common-law partner dies, an estate trustee usually focuses on the deceased’s final return and any estate filings. But the surviving spouse’s own tax return changes too, in ways that are easy to overlook in the middle of everything else that comes with a loss.

This guide covers what’s different on the surviving spouse’s own return the year their partner dies — separate from the deceased’s terminal return and any ongoing estate trust filings, which are their own topic.

Two Returns, Not One — Sometimes Three

It helps to keep these distinct: the deceased’s terminal return, covering income up to the date of death; any ongoing trust return for the estate itself, if the estate continues to earn income; and the surviving spouse’s own personal return, filed as usual for their own income. This guide focuses on the third one.

Notifying the CRA

The CRA needs to be told about the death and about the surviving spouse’s resulting change in marital status. This is generally handled as part of settling the estate, but it directly affects the surviving spouse’s own benefit calculations going forward, moving from a combined family-income basis back to an individual one.

What Can Transfer to You Tax-Deferred

Certain registered accounts, such as RRSPs and RRIFs, can generally roll over to a surviving spouse on a tax-deferred basis where the necessary beneficiary designations or estate arrangements are in place, rather than being fully taxed in the deceased’s hands immediately. Whether a specific account qualifies, and how to elect for the rollover, depends on the account type and paperwork — this is worth confirming with an accountant or the plan administrator rather than assuming it applies automatically.

Property that passes to a surviving spouse, including a jointly held home, can also be treated differently than property passing to other beneficiaries. Get advice specific to what’s actually in the estate.

Pension Income Splitting Ends

If the couple had been splitting eligible pension income for tax purposes, that option ends with the death of one spouse for future years. The surviving spouse’s own pension income, going forward, is reported and taxed as their own.

Credits and Benefits You Should Revisit

• The GST/HST credit shifts from a family-income basis to your own individual net income once your marital status changes.
• The Canada Child Benefit, if there are dependent children, is recalculated based on the new household composition and income.
• Medical expense claims and certain other credits may need to be reconsidered for the year, since some claims can be affected by whose income they were claimed against.
• Survivor benefits available under other government programs are administered separately from your income tax return and should be checked independently.

Timing Your Own Filing

The surviving spouse’s own return is generally still due on their normal filing deadline as an individual taxpayer, separately from whatever deadline applies to the deceased’s terminal return. Don’t assume the two run on the same clock — confirm both deadlines rather than treating the estate’s timeline as your own.

A Few Things Not to Overlook

• CPP and other survivor benefits are applied for and administered separately from your income tax return — don’t assume filing your taxes triggers them automatically.
• Life insurance proceeds received by a surviving spouse are generally not taxable income, though that’s a separate question from how registered accounts like RRSPs and RRIFs are treated.
• Joint accounts and jointly held property can pass to the surviving spouse outside the estate process entirely, which can affect both timing and what ends up needing to be reported where.

Frequently asked questions