T3 Bug

[Elaine Wonder]

I am entering a T3 slip for my mother in law. It has 6 boxes to enter. But the dividend income would 100% pop up on my father in law's T1 and everything else goes to my mother in law's T1. If I enter a big interest income on that slip such as $10k, it would bring the dividend income back to my mother in law. Why is there such an issue. How can we fix it? 

[Geo123]

Hello Elaine Wonder,

The transfer of the dividend works as follows. Where a lower-income spouse receives a dividend and cannot fully use the dividend tax credit, the spouses can make an election to have the dividend included in the other (higher-income) spouse’s income. However, the election can be made only if including the dividend in the other spouse’s income either creates or increases the spousal tax credit that the other spouse may claim.

In some cases, it may be better for you to report all of the taxable dividends that your spouse or common-law partner received from taxable Canadian corporations. You can do this only if it allows you to claim, or increase your claim, for the spouse or common-law partner amount on line 30300 of your return. If you choose this option, do not include these dividends in your spouse's or common-law partner's income.
You may be able to claim a dividend tax credit on line 40425 for dividends that you received from taxable Canadian corporations.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12000-taxable-amount-dividends-eligible-other-than-eligible-taxable-canadian-corporations.html