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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 09-07-2016, 02:53 PM
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Default Eligible Dependant Credit Runaround

Hello,

I have to go to tax court soon to argue the EDC and have been corresponding with a few different government agencies.

Since I have 50 / 50 custody and I care for 2 of my 3 children at least 50 % of the time, and the third child lives solely with me , I cannot understand how the CRA still tries to hide behind their policy of denying me the ED credit . I must also point out that the difference between mine and my ex's salary is aprox $ 15 , 000 per year and we are currently using the " offset method" of CS where I pay to her a small amount each month.

My latest correspondence with the Minister of Finance has an excerpt that states " the tax treatment of the EDC was taken into account in the development of the Federal Child Support Guidelines. As such the child support payments specified in the tables are lower than they would otherwise be if the support recipient could not claim the EDC ."

I think this might have merit if there was only 1 child involved but since there are 3, why couldn't we each claim a different child ?

I can also understand if it referred to a sole custody situation but when custody is split 50 / 50, there are basically 2 independent households caring for the children .

I sincerely doubt that I would be paying a lot more " offset support " to my ex if I was allowed to make the claim .

Does anyone know what I am not understanding here ?
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Old 09-07-2016, 03:56 PM
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I wish I could help , I am currently in the process of applying. they gave me 30 days to come up with all of the paper work , document from the school the dentist the doctor and so on . I took me longer than 30 days and they said sorry your file is closed ?? I'm currently arguing for them to re open. I have 2 kids and have them 50% of the time.The ex was collecting and claiming both kids and she had to pay money back
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Old 09-07-2016, 04:04 PM
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You can only claim a single child for EDC anyways right. That third child must make you eligible....?

The reason this is hard is because you are a man. If you were a woman the laws would change around you.

Case in point:
1. Recent child support clawback changes in Ontarion
2. The tax treatment of child support was pretty much changed after a woman went all the way to the supreme court and LOST and the government changed the laws so she got what she wanted.
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Old 09-07-2016, 04:14 PM
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Have you talked with a tax accountant?

I believe they are trying to deny you on the grounds you pay child support, if your agreement isnt written very specifically to their required wording (there are many posts about this subject on the forums) they will deny you even if you are paying offset. Is it stated in your agreement that you do not pay child support for the child that is with you full time?
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Old 09-07-2016, 05:35 PM
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This has come up a lot. As I understand it (and this is what worked for me), the issue is that in order to the claim the credit you must be receiving child support (don't ask me what the logic is here ...). As an offset payor, technically you are both a payor of CS (to your ex) and a recipient of CS (from your ex).

So you need something in your agreement which says "The parents will pay each other the amounts corresponding to their guideline incomes" or "Parent A will pay Parent B xxx. Parent B will pay Parent A xxx". In other words, you can't just say "the form of child support will be offset" - you have to be able to point to language in an agreement signed by you and ex which spells out that you are both recipients of child support.

You and your ex also have to have agreed (in writing) as who will be making the claim - if you don't agree, no one can claim it. Some people alternate years (Parent A claims in odd years, Parent B claims in even), but there are other ways to do it as well - you just have to agree on it.

If you have these two things in writing (that you pay each other CS and that you have agreed on who will claim the credit in a given year) you should be able to show this to CRA and get the credit. The information you need is also buried here, in the "Note" box:

What are the situations in which you cannot claim the amount for an eligible dependant?

You can only claim one eligible dependent, so having three kids (or fifteen kids) isn't relevant.
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Old 09-09-2016, 11:45 AM
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OK, so I am now gathering what I need to present to the tax court.

My ex is not co operating at all so I had to ask family court for a motion to have the original agreement changed so that it is very obvious that we pay support to each other .

As I understand it, I will also need a letter from the school and their doctors and dentists to prove that they live with me at least 50 % of the time and that I take them to their appointments and pay for them as well .

Is there anything else I need ?

Maybe a receipt from their hockey associations proving that they play in my city as opposed to the city that my ex lives in ?
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Old 09-10-2016, 01:53 AM
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Rely upon the established jurisprudence of Slade [2005] 5 C.T.C. 2285 (TCC), Leclerc [2007] 2 C.T.C 2448 (TCC), de Moissac [2007] 1 C.T.C 2001 (TCC) and subsection 118(5.1) of the Income Tax Act which allows for both parents to claim one wholly dependent person credit in situations where more than one child is involved and both parents have shared custody and pay support in accordance with FCSG, Section 9 (“shared custody”).

The Eligible Dependant Credit and Shared Parenting
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Old 11-28-2016, 03:35 PM
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OK, so first Family Law date came and went and the ex's lawyer just asked to have extra time to get their papers in order ( even though they were legally served with the proper amount of time ) and of course it was granted .

In the meantime, Tax court has rescheduled my court date from mid October to mid January .

Now first case conference in Family law just happens to be the day before the tax court date. Both in mid January and 1 day apart .

My concern is :

I show up in Family Court hoping to get my original separation agreement amended ( so that it clearly shows that both parents paid child support ) and they just delay it a second time .

I then have no way to defend myself in Tax Court the next day .

Can I continue to ask the Tax Court to re-schedule my court date ?

Is there a way to guarantee that at least the Motion to Change the separation agreement gets dealt with in mid January ?

Very frustrating .
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Old 12-03-2016, 02:27 PM
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You need to have the SA worded "just so". Offset child support will be allowed by CRA unless the SA makes reference to legal obligation to pay (i.e. mentions federal guidelines) .

I am attempting to provide the CRA link that explains this. Go to section about shared custody/eligible dependant and read it carefully.

Support Payments 2015
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