Section 7 expenses

[OntarioMomma]

Hey all, I have a question for a friend about section 7 expenses. Sorry if it's a repeat, I searched but only found info about s7 and joint custody.

She has sole custody, they have agreed to split section 7 expenses.

So I know she is supposed to give him receipts, but should they be for the full amount paid or hand made receipts for his portion?

Can they both claim they portion they paid on their income tax? Or is that just in a joint custody situation?

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[rockscan]

No it has to be an exact receipt of what was paid. It has to be a proper receipt from the service provider. If your friend has full custody then they would have the right to claim the child as a dependent on taxes and all expenses for them. By doing so, the cost of the expense is reduced to the NET COST which is what the s7 item cost less the taxes. The payor would then pay their proportionate share of that.

For instance, a sports activity. Tax benefit is $100. Total cost is $500. Payors share is 50%. $500-$100x 0.5= $200. The payor would then pay $200.

You cant provide a receipt for their portion, you have to provide a receipt for total amount paid with nothing blacked out or whited out or removed.

[OntarioMomma]

Thanks Rock, that makes sense, and close to what I was thinking.

So, in a sole custody situation, the non custodial parent cannot claim any section 7 expense, even though they pay a portion?

Is there anything stopping the non custodial parent using the receipt as a tax deduction?
In this case, the non custodial parent is demanding the sports association put his name on the receipt, so there's a question of why he wants that.

[rockscan]

He cant claim it. Thats why you reduce the amount he pays by the tax deduction. He can try but he will get audited. In your friends response she can say "your portion is $xxx due to the tax deduction.

She might also want to direct him to the federal child support guidelines where it says net cost and explains it.

[OntarioMomma]

Great advice, Thanks Rock.

[rockscan]

Also, Im pretty sure most sports/activity providers put the name of the kid on the receipt and the name of the payor is on there as "received from" or the credit card statement.

Your friends ex needs to get over it.