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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 11-19-2008, 11:49 AM
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Question Amount for Children $2000 denied makes no sense!

I have been divorced 4 years now and have 2 children from my first marriage (8 and 6). My ex-wife and I mediated our own agreement and we have joint custody of the children and i pay the equivalent of the chart amount for one child to keep the math easy each year.

The "Amount for Children" claim of $2000 was just denied to me becuase i pay child support and i cant understand this. If you have 2 kids, you can only claim for one child anyways. She claims for one, and i had claimed for the other. He claim was accepted without question, and mine has been denied. I had the same issue with Equivalent to spouse deductions in previeous tax years.

The lesson to be learned is this, and if anyone else has any info on how i should proceed, i am all ears: The issue is with the separation agreement. If you mediate your own agreement and plan to share custody of multiple kids...ensure that the agreements states that if you are paying support, it is only for ONE OF THE CHILDREN. and not the others. IF you pay even $1 in support, your claim will be denied. This is like 30K in tax benefits denied to me and all because our idiot mediator didnt alert us to this fact. Even better, each take sole custody of one of the kids. Works great if you have an amicable split..which we are now..but werent when this was all going down.

In the end, the only people who gain here are the GOVT coffers; my ex doesnt see any increased benefits. Good luck out there. you will need it.

Cheers.
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Old 11-19-2008, 01:57 PM
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I'm a little confused. If you have physical custody of one child, and she of the other (which is how I understand your post) then I don't think you should be paying child support. Something just doesn't seem right in your situation. Have you tried talking it over with a lawyer?

In regards to taxes, I'm sorry but I can't help you there. My fiance doesn't get to write his son off on his taxes. He never has. In our court order, however, there is a clause stating that the bio-mom needs to provide him with his share of her tax return for child care. But that's about it.
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Old 11-19-2008, 01:57 PM
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I have had similar problems claiming child care expenses in the past because of CS payments. So after reading your post I thought I'd do a little reading.
This is what I found that may interest you and other like you.

Taken from this site,

Income Tax Act discriminates against divorced parents

A person in a similar situation was trying to get the tax laws changed to not discriminate against support paying parents, usually men.


After being denied the exemption in 2004 and 2005, Rev. Cornelius was able to successfully claim it in 2006. But in order to do so, he and his wife were forced to rewrite their separation agreement.

And like you mentioned they had to re-write their agreement to state one parent had one child while the other parent had the other child.
Not fair, but someone out there is lobbying to have this changed.

here is another interesting read on the topic of claiming the equivalent to spouse credit.

http://www.timcestnick.com/TaxTools/...Tax_Credit.pdf
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Old 11-19-2008, 03:57 PM
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being able to claim your children as equivalent to spouse on your taxes you have to prove that you have custody (with final order........interim order is not sufficient)........and no spouse nor be common law........and CCRA does rip you apart going back the max of 7 years.......I just went through it.........seems ex tried to claim the same child as equivalent also........even though he is common law........go figure and I had to prove everything.......if there are two children then each parent can claim a child with same above provisions........dont do anythign you cannot back up 100% to them.........they rip you apart and make you feel like a criminal........if you dont have final order that states you both have custody of one child then I would seriously advise against doing this.........you have nothing to prove your case to them........possibly the same child is being claimed by both of you.......you need to co-ordinate this with the ex
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Old 11-19-2008, 04:56 PM
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Quote:
Originally Posted by hodesguy View Post
I have been divorced 4 years now and have 2 children from my first marriage (8 and 6). My ex-wife and I mediated our own agreement and we have joint custody of the children and i pay the equivalent of the chart amount for one child to keep the math easy each year.

The "Amount for Children" claim of $2000 was just denied to me becuase i pay child support and i cant understand this. If you have 2 kids, you can only claim for one child anyways. She claims for one, and i had claimed for the other. He claim was accepted without question, and mine has been denied. I had the same issue with Equivalent to spouse deductions in previeous tax years.

The lesson to be learned is this, and if anyone else has any info on how i should proceed, i am all ears: The issue is with the separation agreement. If you mediate your own agreement and plan to share custody of multiple kids...ensure that the agreements states that if you are paying support, it is only for ONE OF THE CHILDREN. and not the others. IF you pay even $1 in support, your claim will be denied. This is like 30K in tax benefits denied to me and all because our idiot mediator didnt alert us to this fact. Even better, each take sole custody of one of the kids. Works great if you have an amicable split..which we are now..but werent when this was all going down.

In the end, the only people who gain here are the GOVT coffers; my ex doesnt see any increased benefits. Good luck out there. you will need it.

Cheers.
Why not make an amendment to your agreement. I am sure there is a clause in your current agreement that allows the parties to do such.

It might be just a matter of your and your former, sitting down typing out a new clause so that you could make the respective claim. It most likely would have to be witnessed.

By the way, Welcome to the forum!
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Old 11-19-2008, 04:58 PM
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Quote:
Originally Posted by littleman View Post
being able to claim your children as equivalent to spouse on your taxes you have to prove that you have custody (with final order........interim order is not sufficient)........and no spouse nor be common law........and CCRA does rip you apart going back the max of 7 years.......I just went through it.........seems ex tried to claim the same child as equivalent also........even though he is common law........go figure and I had to prove everything.......if there are two children then each parent can claim a child with same above provisions........dont do anythign you cannot back up 100% to them.........they rip you apart and make you feel like a criminal........if you dont have final order that states you both have custody of one child then I would seriously advise against doing this.........you have nothing to prove your case to them........possibly the same child is being claimed by both of you.......you need to co-ordinate this with the ex
CCRA will also accept a legal separation agreement.
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Old 11-20-2008, 08:11 AM
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Thanks for weighing in everyone.

Yes i should have been more clear. We share custody of the kids ( i have them 5 nights then she takes them for 9 nights) I have a new wife and 2 yr old son, and so this system has been working for us.

There could be an amendment to the custody agreement, but my ex's lawyers have advised her against making this change. It s a bit of a long story. She wouldnt sign the agreement if i didnt stupulate to a cluase which allowed her to move to MOntreal to be closer to her family outside the regualr 100km rule which is pretty standard in these agreements, in regards to mobility. So i stipulated. Now she fears that if she sign of on split custody of the kids (she has one , i have the other) that i would use that against her in her attempts to move..if she ever did, or would. Its a bit of a pickle really. I understand where she is coming from, but right now CCRA is taking us for 2k in benefits that we should have.

And thanks for hte welcome, nice to hear from people in similar circumstance. Glad i found thhis place.

take care.
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Old 11-20-2008, 10:54 AM
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This is a very timely post as I'm working on this injustice myself. Fortunately, it looks like I will be able to claim the deduction since when we separated my ex was left owing me a family property debt of $6k which I agreed to recover from her in the form of a child support credit.

The result is that (according to the lawyers) our agreement will be written such that I have a "child support holiday" to be reviewed in 2010 when that child support credit will have been used up. So until then I will not be making any periodic support payments and can claim the deduction.

It is very surprising to me that the problem (in my opinion) of parents paying support being unable to claim eq. to spouse even if there are 2 children in a shared custody situation isn't being addressed more quickly. I think shared is becoming more the "norm" and there must be thousands of parents wanting this to be changed.

What happens if half-way through the tax year a parent changes jobs and the child support pendulum swings the other way, such that both parents have paid support for the same children in a tax year... can neither make a claim? Are those young children any less "dependant"? By law, that seems to be the case which is totally rediculous.

The references provided are great, thank you for searching them out to help us. It seems the judges do see that there are changes that should be made. Does anyone have any more recent expereince, perhaps where you have "on paper" split custody, or paid child support for only one of your two shared children (even though the amount is in-line with the total requirement for 2 children)?

Thanks for your input.
DD
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Old 12-21-2008, 09:01 PM
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Quote:
Originally Posted by hodesguy View Post
This is like 30K in tax benefits denied to me and all because our idiot mediator didnt alert us to this fact.
Hi - as I'm about to go through this with CS, and joint custody of two kids, I'll try to get the agreement to indicate sole custody of one, and she has sole custody.

How does doing this amount to a 30k tax break? Also - since I'll be having the kids 50% of the time, for support payments do i primarily look at support payments for one child from the tables? I think so - I guess the other q is - to calculate that - i do my gross income and calculate payment A, i do her gross income and calculate payment B and then the actual payment for support will be A - B = C for the one child?

Thanks - just going over all this, and need to be informed. All I really want (looks like not possible) is a good 50/50 split where i support the ex and kids so we all have the equiv lifestyle in each home when were done.

thx
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Old 12-21-2008, 09:40 PM
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The equivalent to spouse credit, now called an amount for eligible dependant translates to around $1,500 in tax relief. Only one child can be claimed under this rule.

The $2,000 amount for children under 17 translates to about $600 in tax relief per child under 17.

The original post says that he is losing out on $30K of tax relief. That cannot be correct.
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