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Difference between revisions of "Child Support"
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To claim this deduction, the lawyer must write a letter to the CRA setting out what portion of their fees were attributable to advancing or enforcing a child support claim. If you intend to ask your lawyer for a letter like this, you must tell your lawyer as soon as possible, preferably the moment the lawyer takes your case, so that they can keep a log of time spent on the child support claim. | To claim this deduction, the lawyer must write a letter to the CRA setting out what portion of their fees were attributable to advancing or enforcing a child support claim. If you intend to ask your lawyer for a letter like this, you must tell your lawyer as soon as possible, preferably the moment the lawyer takes your case, so that they can keep a log of time spent on the child support claim. | ||
In | In shared parenting situations, where each parent has to pay child support to the other parent, the higher income parent often just pays the difference between the higher amount they owe and the lower amount they would receive. This difference is called a ''set-off amount''. In court order or agreement, however, it matters how this arrangement is worded. Recently, the Canada Revenue Agency (CRA) has taken the position that: | ||
*if the agreement or court order says that ''only'' the higher income earning parent pays the difference, then | |||
*the CRA will treat the situation as if there is only ''one'' payor and ''one'' recipient of child support. | |||
1. | In that case, the CRA will not allow the parents to share child tax deductions or grants, and will not allow the parents to claim the children as dependents when they file taxes. It is important, therefore, to state that ''each'' parent pays child support to the other. And it's probably best to not even mention in the court order or agreement the net set-off amount actually paid. | ||
1. | Suggested wording for an agreement dealing with child support in shared parenting situations might be as follows: | ||
(a) Parent 1’s annual income for present calculation purposes is $XX,XXX; | |||
(b) Parent 2’s annual income for present calculation purposes is $YY,YYY; | <blockquote><tt>1. The present parenting arrangements made with respect to the children qualify as shared custody within the meaning of the Federal Child Support Guidelines (the “Guidelines”), in that it is anticipated by Parent 1 and Parent 2 that the children will live with each Parent not less than 40% of the time.</tt></blockquote> | ||
(c) Such that Parent 1 will pay Parent 2 the sum of $XXX as base Guidelines child support for 2 children, and Parent 2 will pay Parent 1 the sum of $YYY as base Guidelines child support for 2 children. | <blockquote><tt>1. For the purposes of determining the basic child support payable pursuant to the Guidelines, Parent 1 and Parent 2 agree that:</tt></blockquote> | ||
<blockquote><blockquote><tt>(a) Parent 1’s annual income for present calculation purposes is $XX,XXX;</tt></blockquote></blockquote> | |||
<blockquote><blockquote><tt>(b) Parent 2’s annual income for present calculation purposes is $YY,YYY; </tt></blockquote></blockquote> | |||
<blockquote><blockquote><tt>(c) Such that Parent 1 will pay Parent 2 the sum of $XXX as base Guidelines child support for 2 children, and Parent 2 will pay Parent 1 the sum of $YYY as base Guidelines child support for 2 children.</tt></blockquote></blockquote> | |||
Some lawyers and accountants even suggest that actual cheques for the full amounts should be exchanged to show that each parent pays child support to the other. | Some lawyers and accountants even suggest that actual cheques for the full amounts should be exchanged to show that each parent pays child support to the other. | ||
