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  • #76
    i have found some information on this through FOI.

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    • #77
      1. For those who are fighting the CRA decision by way of appeal or going to tax court: Are you in the meantime making payments, or had paid the allegded amount back to the CRA?

      2. So from my understanding, the two parents can write a letter explaining that they agree on who claims which child, and who pays what $$ to whom and when per month. Do these letters need to be notarised or sworn to, before it is accepted as valid evidence by the CRA?

      3. Does a separation agreement/divorce judgment always supercede any kind of mutual letter of agreement between divorced parents? or can a proper letter of agreement trump whatever was written in the separation agreement/divorce judment.

      I got my official letter explaining why I was denied last week:

      "AMOUNT FOR AN ELIGBLE DEPENDANT
      Based on the Order provided you are required to pay child support.
      -When statutory scheme such as the Federal Child support Guidelines is used, the payer of the set-off amount is the only individual required to pay child support.
      -You are not able to claim an amount at lines 305 and 367 for a child if you have made or were required to make support payments for that child at any time in the year, whether support payments are deductible or non-deductible

      AMOUNT FOR CHILDREN BORN IN 1996 OR LATER

      We have adjusted your claim from $xxxx to $0.00 for the following reason(s):
      -You cannot make a claim for a child when you are required to make support payments for that child at any time in the year".

      i look forward to some help from others here, as i am gathering all my info as I will be calling CRA soon to discuss. Thanks in advance.

      Comment


      • #78
        So, basically, if you are a net payor of child support, you can't claim the children as a dependent?

        Comment


        • #79
          It's all in the wording

          I received the same letter. Is it possible that any mention of the federal cild support tables will trigger a rejection of the claim? Our agreement is very clear that we are obligated to pay each other and there is no "set-off" amount mentioned in the letter.

          I researched this online

          "An agreement that calculates child support obligations with reference to a statutory scheme such as the Federal Child Support Guidelines, and that does not require both parties to pay a child support amount, does not meet the requirements of subsection 118(5.1). The income of both parties is taken into consideration in determining the amount that one individual is required to pay, but both parties are not legally obligated to pay a support amount."


          If you search for this

          "19 June 20142013-0502091E5 E – Eligible Dependent Credit"

          It should provide some illumination

          Comment


          • #80
            So, an apparent policy change by CRA. Apparently you need an agreement that states
            - both parents pay the other (not just one paying the difference)
            - parents' agreement on who claims the credit

            http://taxinterpretations.com/?p=28480 (from potasco's search)
            "Additionally, when a written agreement or court order requires that both parents pay a child support amount but the parents agree (outside of the court order or written agreement) to use a "set-off" arrangement such that only one parent makes a payment for the difference, subsection 118(5.1) of the Act could still apply. The supporting documentation and the facts provided by the individuals in question must support the existence of the legal obligation of both individuals to pay a child support amount. However, where the written agreement or court order states that only one individual will make a payment, even if that payment is for the difference in support amounts, it is unlikely that both parents would be considered to be required to pay a support amount, and subsection 118(5.1) would not apply."
            Last edited by dinkyface; 11-25-2014, 03:45 PM.

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            • #81
              19 June 2014 seems pretty recent to me.

              Comment


              • #82
                I'm agreeing with you. Other posters here have received different judgements from CRA before June 19.

                Comment


                • #83
                  it seems all inconsistent in the application

                  Comment


                  • #84
                    Update:

                    Yesterday an agent from the processing review office called me back, after the first agent I spoke to was unable to answer my questions. They told me up to 72hr wait.

                    Well, I waited maybe 2 hours. The lady explained that based on the wording of my divorce decree, the claim was denied based on that. My decree states set-off amount and the words of Federal Child Support Guidelines. The wording also only shows me as the one paying for child support.

                    I told the lady that based on their rules and my wording; I understood why it was denied. I further explained that my ex does pay me support and I pay her, and out of convenience, I pay her the difference. The lady completely understood.

                    Furthermore, I asked if I could merely get a notarised letter done up with my ex and I explaining that she pays me and I pay her, and the frequency and the shared custody agreement. She said no because the court order will always supersede a letter drawn up by us.

                    She then told me that in order to remedy the situation, I needed to get my lawyer to reword that portion of the divorce decree. She was not willing to provide me with exact wordings or give legal advice but alluded to a lot!

                    She said that the use of the phrase "set-off" will more than likely bring the claim into disrepute and may be denied based on that. I asked her if I remove that phrase if it would be ok? She said she cannot tell me, but that it is an avenue definitely worth looking into.

                    Also, she said that the term "Federal Child Support Guidelines" also raises a flag for them, and although the guidelines is used as a calculator to determine who pays what, and whoever out of convenience pays the difference, that this phrase also would raise flags for them and deny the claim, as she explained that the phrase implies that only ONE person is obligated to pay support.

                    I asked her, if I remove the phrase, if it would be okay. she once again said, she could not give advice, but stated that it was an avenue definitely worth looking into.

                    I then asked if I had to have my contract amended each year. She said no, that they are able to see based on salaries who must pay what, and that they may simply use their own calculations. But, she did say, I may be audited again, and to simply resubmit documents, and if the need be, have wording redone again, but she did not state that as fact.

                    She said, that her office simply did the review and to forward all new documents and orders to the appeals office. I told her I had already filed an appeal, and that I got a letter stating that it may take up to 6 months before they begin. She said yes, this was correct. she also advised that I should start making payments on the debt. If I win the appeal, they will pay me back with interest.

                    I remained cordial and friendly with her.

                    I will now take the wording vocalfather provided and speak to my lawyer.

                    To anyone else: have you ever been able to amend wording of a divorce decree/order yourself? if so, what are the steps?

                    cheers!

                    Comment


                    • #85
                      An agreement that calculates child support obligations with reference to a statutory scheme such as the Federal Child Support Guidelines, and that does not require both parties to pay a child support amount, does not meet the requirements of subsection 118(5.1). The income of both parties is taken into consideration in determining the amount that one individual is required to pay, but both parties are not legally obligated to pay a support amount.


                      This from an internal technical guidance and interpretation from CRA

                      Comment


                      • #86
                        2014 taxes may be very complex for many parents with shared custody
                        General restriction

                        3.74 By virtue of subsection 118(5), an individual cannot claim a personal tax credit under subsection 118(1) for a particular person for a tax year if the individual is required to pay a support amount for that person to his or her current or former spouse or common-law partner. This rule applies only if the individual lives separate and apart from the current or former spouse or common-law partner throughout the year because of the breakdown of their marriage or common-law partnership, or if the individual claims a deduction for the year under section 60 for support amounts paid to the current or former spouse or common-law partner. For example, where an individual is not required to pay a support amount in respect of a particular child and that child otherwise meets all the conditions required for a deduction under paragraph 118(1)(b) at any point in the year, the fact that the individual claims a deduction for the year under section 60 for support amounts paid to a current or former spouse or common-law partner does not restrict the individual from claiming the eligible dependant amount for that particular child.

                        A requirement to pay a support amount includes amounts payable or paid to a third party which are deemed under subsection 60.1(1) or 60.1(2) to be payable or paid to the payer’s current or former spouse or common-law partner.

                        Exception: Eligible dependant and child tax credits

                        3.75 Sometimes more than one individual is required to make support payments for the same child in a tax year. This may occur where there is shared custody or where there is a change in custody during the year. Effective for the 2007 and subsequent tax years, subsection 118(5.1) ensures that one individual can still claim the eligible dependant and child tax credits under paragraphs 118(1)(b) and 118(1)(b.1) respectively. However, both individuals must agree on who is entitled to claim these personal tax credits in respect of a particular person. If the parties cannot agree, neither individual can make the claim.

                        3.76 To qualify for the exception in subsection 118(5.1), the court order or written agreement must require both individuals to make child support payments. In Verones v The Queen , 2013 FCA 69, the Federal Court of Appeal confirmed that although the Federal Child Support Guidelines give consideration to the incomes of both the payer and the recipient to determine the quantum of child support, only the payer has a legal obligation to pay a support amount. When both parties are not required to make a support payment, the payer does not qualify for the exception in subsection 118(5.1) and is not entitled to claim the eligible dependant tax credit.
                        Income Tax Folio, S1-F3-C3: Support Payments
                        Here is the ruling:
                        CanLII - 2013 FCA 69 (CanLII)

                        Comment


                        • #87
                          I'm unsure how this differs from what happened before. I had to do the same thing when I fought last year.


                          Sent from my iPhone using Tapatalk

                          Comment


                          • #88
                            Line 305

                            I find myself in the same boat regarding the Eligible Dependant Decuction. I have retained a Tax Lawyer to help my family lawyer with the new wording of my child support agreement.
                            This whole thing is going to cost me at least $2000 in legal fees assuming Mom cooperates. If she doesn't it could go as high as $5000. Plus if I am not successful in winning the appeal retroactively I'm out another $5000 for the last two years of tax refunds.
                            118(5) and 118(5.1) need their intent clarified. The way CRA are enforcing this policy is pure lunacy.
                            [you cannot advertise your group or business here without the express permission of the forum owner]
                            Last edited by blinkandimgone; 02-12-2015, 05:10 PM. Reason: advertising

                            Comment


                            • #89
                              I can't find the parenting group on Facebook. Please post the link!

                              Comment


                              • #90
                                Edited to remove link, you cannot advertise your group or business here without the express permission of the forum owner.

                                Especially in FB, which people use under their real names. It is not a good idea to post or link to anything that can identify you.
                                Last edited by blinkandimgone; 02-12-2015, 05:05 PM.

                                Comment

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