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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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Old 01-07-2010, 11:01 AM
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Default Spousal Equivalent for CRA

Here is the situation.
Separated Jan 9, 2009.
A couple of Temporary Consent Orders.
Have 3 children. 1 is no longer "child of the marriage"
For the other two we have "joint custody" with ex having "primary residence". My access is under review due to a court ordered assessment. I do not currently enjoy more than 40% access.
I would like to be able to claim one of my children as "equivalent to spouse" on my Income Tax documents.
If I were to get my ex to agree to allow me to claim one of them, what are the implications to her?
I would assume her CTC would be reduced but not sure?
It would certainly put me in a better position financially due to the tax implications.
She is asking / threatening a motion for Section 7 expences. We just had a case conference and the Judge suggested rather strongly that she should be careful in moving forward with a motion due to my financial situation, in that I am running at a loss of about $2K per month. There is just no more money right now. I do realize that I should be contributing to some of these expences and I thought that this might be a way of "making" extra money to fund this request.
Does anyone have any thoughts?
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Old 01-07-2010, 11:06 AM
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I don't know too much about this. But I would think if you each claim one child for equivalent to spouse then tax wise that would be the most savings between you. There is not much of a deduction when you claim a second child.

I'm sure someone has a much better answer for you though.
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Old 01-07-2010, 01:31 PM
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Do you pay any CS? If yes, you may not be able to claim your child as Equivalent to Spouse. My ex claims our son as her dependent even though she does not spend a dime on him and does not pay me any CS. In 2007 we both claimed him as our Equivalent to Spouse - I don't know about her claim but mine was allowed. She did claim him again for 2008.

You can anonymously call CRA tax help line and ask for their advice.
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Old 01-07-2010, 02:19 PM
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Yes, I do currently pay child support.
I am hoping in the next couple of months to get the kids 40% which means that there would be off setting cs which means neither of us could claim equivalent to spouse?
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Old 01-07-2010, 02:42 PM
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Quote:
Originally Posted by Cobourg View Post
Yes, I do currently pay child support.
I am hoping in the next couple of months to get the kids 40% which means that there would be off setting cs which means neither of us could claim equivalent to spouse?
CRA no longer looks to see if you paid CS or not. If you have shared custody, meaning that you have the child between 40 and 60% of the time, you can claim "equivalent to a spouse". They changed it sometimes in 2009, so it's still new and you won't find a lot of information online.

The reasoning is that with shared custody, you're both technically paying CS.

If you have two children, you can both claim one. And, I believe this would mean you can both claim CCTB/UCCB for one child each.
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Old 01-07-2010, 02:45 PM
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IF I don't end up with them 40% of the time, and if I can get my ex to agree, could I still claim the equivalent of spouse?
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Old 01-07-2010, 02:50 PM
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Quote:
Originally Posted by Cobourg View Post
IF I don't end up with them 40% of the time, and if I can get my ex to agree, could I still claim the equivalent of spouse?
if she agrees to it (in writing) then YES! It shouldn't matter if you don't have the child more than 40%. If you look at the differences in savings between her claiming both kids, and each claiming one, she would see that there will big a bigger savings if you each claim 1 child. You could always offer to split the part of ther refund relating to it as an incentive.
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Old 01-07-2010, 02:53 PM
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That is exactly what I was hoping to achieve.
Not sure if I will be talking to someone who is willing to listen and participate in the process or the usual bitter ex that is extremely difficult to get along with at the best of times.

Thanks for the help and info. We will see what happens.
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Old 01-07-2010, 02:56 PM
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I do believe you need shared custody in order for CRA to accept it.

By CRA's standard, there is no difference between having your for 5% of the time or 39% of the time.

I am sure you could sign an agreement with your ex that states you have shared custody and allowed to both claim one child as a dependent, but that CS payments will remain what they are now.

I am not sure if this would be accepted by CRA if you were audited.
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Old 01-07-2010, 03:17 PM
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Just read this on the Divorcemate website. If you go down to page 4, they say you can allocate the benefits to one parent. And, that CRA will not actively pursue it.

www.divorcemate.com/library/SharedParenting.pdf
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