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Canada Revenue / Child Support Question

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  • Canada Revenue / Child Support Question

    I hope I can explain this clearly.

    For 2016 tax year, ex and I have an agreement saying:

    January - June CS is $1660 per month

    July - December CS is $3500 per month (as we updated July 1)

    So, ex pays his child support by bank transfer usually a day or two prior to the first of the month.

    So, January 1 2016's payment ($1660) was received by me on December 28/15.

    All the other month's were paid a few days before the first.

    January 1 2017's payment ($3500) was received by me on December 29/16.

    So ex says we should calculate for when the payment was actually received for tax purposes. Therefore the $1660 received on Dec 28/15 would be on 2015 taxes even though it is a payment meant for January 1, 2016. He says that this makes the most sense as CRA follows this procedure with the income reported on T4's as well. CRA counts the year when the payday is, not the hours/date you worked.

    I think that it is based on our agreement and therefore the few extra days mean nothing.

    Ultimately I couldn't care less as it doesn't change my taxes. He is freaking out, being audited and has requested a proper receipt from me. I completed one based on the actual payments on the agreement and filed that on my taxes. He is the one arguing about the extra $2,000.

    Anyone know the law? Is it year the actual money was received or when the payment is intended for?


  • #2
    I would think that the payment made in December for January would be classed as a January payment just prepaid by a couple of days. Not your fault if he pays a few days early consistently.

    But....if he has consistently done that and it wont change your taxes what would be the repercussions on giving him a receipt saying he paid the money on the date for January 1st support? None that I can see. He seems to want to say that the money was used for december support so is he trying to get away with saying he paid it twice? If he is getting audited then I would think the person doing the audit can follow the paper trail and realize that he did pay in advance.

    Look at it this way, its in some ways a bill. You can pay a bill before the due date but that doesnt change the due date, it just means you paid it early. The day the support is due doesnt change just because he paid it early. As long as he is showing 12 payments for CS for the year then I cant see why the early payment in December 2015 for January 2016 should be in the 2015 tax year. That would mean he made 13 payments.

    I am in no way an expert but to me that is the way it should go. He is probably under a lot of stress due to being audited. Just because he is being audited doesnt mean that he was red flagged or anything. My parents were audited many years ago and after all was said and done, they ended up getting more money back due to mistakes the guy doing their taxes made. Needless to say then never went back to that tax preparer again. CRA just randomly picks people.


    • #3
      Why is CS being reported in taxes? I didn't think you reported CS anymore? Or is this a mix of CS and SS?

      I agree with the above that a couple days doesn't make much of a difference and I would personally stick with the January 1st as the payment date.

      Sent from my iPhone using Tapatalk


      • #4
        I'd agree with your ex on this one. Your taxes reflect what actually has been paid/received and your receipt for 2016 should reflect what he actually paid you in that year.

        My ex owes me thousands in arrears from past years and if/when I receive money from him, for example, for 2014 I claim the money in the year I receive it (not the year it applied to).

        Your tax returns may vary every year a few thousand but this is another example of how CRA procedures/allowances vary from family court.

        Your ex could make arrangements to have his bank make automatic payment on the 1st of every month. He can set this up with his online banking if he chooses.


        • #5
          Thanks everyone.

          Berner, I do receive SS as well but it is an additional amount to the child support. Both supports need to be declared although I do not pay any tax on the child support.

          STOS, he isn't trying to claim 13 payments. Only 12. His audit came before I submitted my taxes so it was not a result of me. He was audited last year as well so I am unsure of what he is doing with his corporation that is triggering this. I don't mind giving him a different receipt. I just wondered if I filed my taxes wrong.

          Arabian, thanks that is helpful too.


          • #6
            CRa has a copy of the separation agreement (I presume). If he isn't in arrears, I would think CRA would apply the income that the separation agreement says to the appropriate year. You should both be consistent in the amounts you declare that you received and the amounts he says he declared that he paid. If that isn't the case, CRA will sniff around and that is the last thing both of you need.


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