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

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  #1 (permalink)  
Old 07-28-2016, 07:22 PM
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Default Typical handling of SS/CS and Tax Credits

A friend asked for some advice in updating his current SS/CS obligations due to a recent raise in his income. He has 50/50 custody and pays child support on an offset calculation.

His ex is currently enrolled in school full time, works part time and is somehow supported on ODSP. ODSP is paying for her college and she works part time at minimum wage.

He wasn't even aware of CCTB at all, let alone the increases low income recipients will receive as of July 2016. He estimates her income to be less than $18000/a. His income is substantially higher at $55000/a. He pays his own daycare and she pays her daycare, but he pays 100% of everything else - hockey, soccer, etc. He provides all health insurance for both her and the child, and pays all deductibles and uncovered amounts for the child.

What is the typical way shared parenting with offset handle the CCTB?
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Old 07-29-2016, 12:22 AM
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Parents with 50/50 can opt to share the tax benefit - it's paid to parent 1 for the first six months of the year and parent 2 for the latter six months (instead of being split 50/50 every month). I can't remember what ex and I had to give CRA to set this up, but I'm sure you can find out with a phone call.
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Old 07-29-2016, 07:46 AM
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Quote:
Originally Posted by stripes View Post
Parents with 50/50 can opt to share the tax benefit - it's paid to parent 1 for the first six months of the year and parent 2 for the latter six months (instead of being split 50/50 every month). I can't remember what ex and I had to give CRA to set this up, but I'm sure you can find out with a phone call.
Opt to share? I thought that it was enforced by CRA that if you have your child 50% of the time and can prove it with a court order/signed agreement that CRA must automatically split the UCCB/CCTB between both parents.
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Old 07-29-2016, 10:44 AM
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Originally Posted by SuzieSunshine View Post
Opt to share? I thought that it was enforced by CRA that if you have your child 50% of the time and can prove it with a court order/signed agreement that CRA must automatically split the UCCB/CCTB between both parents.
This person wasn't even aware of CCTB let alone how much the monthly amount is. So, it isn't an automatic adjustment made by CRA I guess.

It was never an issue in my cs agreements as the ex made too much to qualify. It's helpful knowing that a split is typical and common.

Thanks.
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Old 07-29-2016, 12:51 PM
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Okay "opt to share" wasn't great word choice. If the parents provide CRA with the necessary info, CRA will split the benefit, but it's up to the parents to inform CRA. Otherwise I believe the benefit goes to whoever claims the child on taxes.
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Old 07-29-2016, 08:50 PM
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Originally Posted by stripes View Post
Okay "opt to share" wasn't great word choice. If the parents provide CRA with the necessary info, CRA will split the benefit, but it's up to the parents to inform CRA. Otherwise I believe the benefit goes to whoever claims the child on taxes.
True, but if both parents claim the kid(s) on their taxes they will both be audited and CRA will decide to share.
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Old 07-30-2016, 02:09 AM
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Quote:
Originally Posted by stripes View Post
Parents with 50/50 can opt to share the tax benefit - it's paid to parent 1 for the first six months of the year and parent 2 for the latter six months (instead of being split 50/50 every month). I can't remember what ex and I had to give CRA to set this up, but I'm sure you can find out with a phone call.

I didn't have that as an option, don't think I'd want it as it makes budgeting difficult. With myself, the monthly payment is split in half, with my ex receiving one half, and myself the other, each month. It can also be backdated to the point it should have started being split. I ended up receiving nearly $2000 when I got it started, and my ex stopped receiving any until her deficit was cleared due to that. It had been well over a year since separation before I realized I should be doing that.

For proof, they required my court order, and multiple letters from various places stating that I had custody of the kids. Daycare, school, dentist and doctor. There are a few other options they list I believe, it's quite similar if not the same as the demands of proof they make of you for claiming a child on your taxes.
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Old 07-30-2016, 02:24 AM
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As for the CRA doing an audit and realizing things should be shared, I highly disagree based on my experiences.

For 2 of my last 3 tax returns they have disallowed me to claim a child as a dependant on my taxes, based on my paying child support. I have 50% custody, pay offset, at the whopping rate of $1 per month. We have two children and each claimed only one child, and ensured they were not the same child.

I had to appeal both times, and while it took 4-6 months or so each time, and a bunch of hoops to jump through, the appeal was eventually granted. It makes me wonder how many eligible people have been denied and are unaware that they should be appealing that incorrect decision.

They in fact seem very eager to deny benefits being shared, and try to prevent it.
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Old 07-30-2016, 02:00 PM
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Quote:
Originally Posted by Soiled View Post
As for the CRA doing an audit and realizing things should be shared, I highly disagree based on my experiences.

For 2 of my last 3 tax returns they have disallowed me to claim a child as a dependant on my taxes, based on my paying child support. I have 50% custody, pay offset, at the whopping rate of $1 per month. We have two children and each claimed only one child, and ensured they were not the same child.

I had to appeal both times, and while it took 4-6 months or so each time, and a bunch of hoops to jump through, the appeal was eventually granted. It makes me wonder how many eligible people have been denied and are unaware that they should be appealing that incorrect decision.

They in fact seem very eager to deny benefits being shared, and try to prevent it.
Part of this issues is he hadn't filed his taxes since 2012. So, step one was getting him caught up on tax filing. The 2015 tax filing asked the question about shared parenting, the previous years did not. The 2015 tax filing also calculated his CCTB, which was very eye-opening to him. He doesn't care much about recouping CCTB benefits for previous years, but until his returns are assessed, he won't know the $$ figures involved.

He stated he claimed the child as a dependent for those years. She probably did as well. So, how does that one work? Will CRA split that credit 50/50?
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Old 07-30-2016, 02:15 PM
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If I remember what I read on that correctly, if they both claim the same child, both will be denied
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