Manitoba personal tax credit cannot be claimed in both spouse's tax return

Profile is giving the warning Taxpayer is claimed as a dependent or transfer the age/disability amount to their spouse and cannot claim the cost-of-living tax credit.

This situation exists from tax year 2013 and beyond. This won't happen when the customer is preparing a tax return for 2014 and after.

As per the CRA:

(i) The taxpayer cannot claim this credit if he/she was claimed as a dependent by anyone on his or her Form MB428.
(ii) The taxpayer was confined to a prison or a similar institution at the end of the year, and there for six months or more during the year;
(iii) Taxpayer's spouse or common-law partner is claiming a transfer of part or all of his/her age amount, or disability amount on his or her Schedule MB(S2); or

Another person is claiming a transfer of part or all of the taxpayers -  disability amount on line 5848 of his or her Form MB428.

If the situation (i) or (iii) occurs in the tax return, then Profile will give the above warning.

Resolution

This situation will occur when both are having lower income and they don't need to transfer these credits. In that case, follow these steps:

1. Go to the tax return who is having spousal amount in line 303 of S1 or line 5812 of MB 428.
2. Override the values as zero in the fields 303 of S1, 5812 of MB 428, 353 and/or 357 of S2, and 5902 and/or 5907 of MBS2.
3. Answer no to the question Do you wish to claim the personal tax credit in the form MB 479.
4. The other spouse will automatically get this credit in their MB479, under Personal Tax Credit.