Getting Married Cross-Border: Tax Implications for Canada-US Couples

When a Canadian marries a US citizen (or vice versa), the tax implications hit both returns immediately. The US filing status changes (married filing jointly or separately), the Canadian marital status changes (which affects credits, benefits, and the attribution rules), and new reporting obligations appear (FBAR for the US spouse on Canadian accounts, T1135 for the Canadian spouse on US accounts). If one spouse moves to the other’s country, the move adds departure tax, residency questions, and the first-year filing election on top of the marriage changes.

How does marriage change my US filing status?

Your US filing status is determined as of December 31. If you are married on that date, you file as married (either jointly or separately) for the entire year. The options:

• Married filing jointly (MFJ): both spouses report worldwide income on one return. The tax brackets are wider, and most credits and deductions are more generous. For a US citizen married to a Canadian who is not a US person, filing jointly requires a section 6013(g) election, which treats the Canadian spouse as a US resident for income tax purposes. This means the Canadian spouse’s worldwide income (employment, investment, Canadian pension) is reportable on the US joint return, with an FTC for Canadian tax paid.
• Married filing separately (MFS): each spouse files their own return. The US spouse reports only their own income. The Canadian spouse does not appear on the US return (and does not need a US tax ID unless they have US-source income). The MFS brackets are narrower and many deductions are limited (no student loan interest deduction, limited child tax credit, no education credits). MFS is often chosen when the section 6013(g) election would create a net tax increase by pulling the Canadian spouse’s income into the US system.
• The filing jointly guide walks through the section 6013(g) election in detail, including how to revoke it.

How does marriage change my Canadian return?

On the Canadian side, marriage (or common-law partnership, which Canada recognizes after 12 months of cohabitation) changes the T1 return in several ways:

• Spousal amount credit. If the spouse’s net income is below the threshold (approximately $15,705 for 2025), the higher-income spouse can claim the spousal amount credit, reducing their tax by approximately $2,355 federally.
• Income-tested benefits. The Canada Child Benefit (CCB), the GST/HST credit, and the Old Age Security clawback are all calculated on family net income. Marriage adds the spouse’s income to the calculation, which can reduce or eliminate these benefits.
• Spousal RRSP contributions. A married or common-law person can contribute to a spousal RRSP (within their own contribution room), which shifts the eventual withdrawal income to the lower-income spouse. The attribution rules prevent the income shift if the withdrawal happens within 3 years.
• Transfers between spouses. The principal residence exemption, medical expenses, donations, and other deductions can be pooled or transferred between spouses on the Canadian return.

What new reporting obligations does marriage create?

Marriage can trigger new account-reporting obligations in both countries because each spouse may now have a financial interest in the other’s foreign accounts.

For the US spouse (on the Canadian spouse’s accounts):

• FBAR. If the US spouse has signature authority over, or a financial interest in, the Canadian spouse’s accounts, the US spouse may need to report those accounts on the FBAR. A joint bank account with the Canadian spouse is reportable. Even a non-joint account over which the US spouse has power of attorney may be reportable.
• Form 8938. The FATCA reporting threshold for married filing jointly is higher than for single filers ($100,000/$150,000 if in the US, $400,000/$600,000 if abroad), which can eliminate the filing requirement. But marriage also potentially adds the spouse’s accounts to the reportable pool.

For the Canadian spouse (on the US spouse’s accounts):

• T1135. If the Canadian spouse holds or has an interest in foreign property (the US spouse’s US accounts, a jointly held US brokerage account) with a total cost exceeding $100,000 CAD, Form T1135 is required.

What about gift tax between spouses?

The US unlimited marital deduction (IRC 2523) exempts gifts between spouses from gift tax, but only if the recipient spouse is a US citizen. If the recipient is a non-US-citizen spouse (a Canadian), the annual exclusion for gifts is higher than for non-spouses ($185,000 for 2024, indexed) but not unlimited. Gifts above that amount require filing a gift tax return (Form 709).

• Canada does not have a gift tax, so the Canadian spouse receiving a gift has no Canadian reporting obligation on the gift itself. However, if the US spouse transfers investment property to the Canadian spouse, the Canadian attribution rules (ITA 74.1) attribute the income and capital gains back to the transferring spouse. The cross-border gift tax guide covers the full framework.

What if one spouse moves to the other’s country?

Marriage often precedes or coincides with a cross-border move. The tax implications of the move (departure tax, dual-status return, first-year elections) layer on top of the marriage changes:

• Canadian moves to the US. The departure from Canada triggers deemed disposition. The first US return may be a dual-status return or full-year election. Filing jointly requires the 6013(g) election for the Canadian spouse.
• US person moves to Canada. The US person becomes a Canadian resident (taxable on worldwide income in Canada). They continue filing US returns as a citizen. The RRSP, TFSA, and reporting obligations all begin. The US citizen moving to Canada checklist covers the sequence.
• Neither moves. If the spouses live in different countries after marriage, each files in their own country. The US spouse may still need to decide on filing status (MFJ with 6013(g) or MFS). The spouse stayed in Canada guide covers this scenario.

What should I do next?

Before filing the first return as a married couple, model the MFJ vs. MFS decision on the US side, update the Canadian return for the spousal status change, and inventory the accounts that now have reporting obligations (FBAR, 8938, T1135). If the marriage coincides with a move, coordinate the departure tax and first-year elections with the filing status decision.

• Filing jointly with a non-resident spouse (6013g), the MFJ election
• Spouse stayed in Canada, filing when you live in different countries
• Cross-border gift tax, the rules on transfers between spouses
• Income splitting strategies, optimizing the combined tax position
• Joint accounts cross-border, the reporting on shared accounts

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.