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Old 01-27-2013, 03:09 PM
Mess Mess is offline
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The previous subsection (3) states that:
Quote:
(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.
Subsection (4) states that the UCCB is an exception to that, and will not be applied directly to calculation of the expense. It is still added to income.


I'll try to be clearer: If you have 20k income and the gross amount of child care is 8k. You would receive (ballpark) 4.6k in CCTB and 1.2k UCCB. The child care is 50% subsidized, and for my example the subsidy is paid to the parent. The parent would have 8k in receipts but we have to apply the subsidy. It usually doesn't work that way, but this is for illustration...
  1. The 1.2k UCCB is taxable income in the eyes of CRA and is added to the 20k.
  2. The parent would have 8k of gross child care, minus 4k in subsidy, so net child care is 4k.
  3. Child care is further reduced by the tax benefit. At 21.2k, the marginal tax rate is about 20%. The average tax rate is about 10% The child care would receive a deduction at the 20% rate, so should be reduced by that amount.
  4. Final net child care is therefore 3.6k.
  5. CCTB is now added to line 150 to determine the amount used for proportionate split of the expense. This gives 25.8k for the calculation of the split.
  6. Assuming the other parent's income is 75k, you are looking at a 26/74 split.
This is assuming there aren't any other factors affecting line 150, or other benefits or deductions involved. I rounded and ballparked some figures; it is just for illustration.
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