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  • CRA Eligible Dependant Credit

    Hi again.
    just my luck, I just received a new request from the CRA regarding:

    -Eligible Dependent credit

    As an FYI, this is the 3rd request from the CRA in the 3 years I have been separated/divorced. First time they wanted to me to prove my child care expenses and the second time they want to know the date when my ex and i stopped living together. I got a pass both times.

    Now, back to the Eligible Dependent Credit.

    I've been reading and it sounds like they've ammended their view on how they determine if you can claim.

    I share custody and our agreement says

    To satisfy each party's obligation: Father will pay Mother a set off amount z, based on a support payment of x from father to mother and a support payment of y from mother to father.

    When drafting up the agreement with lawyers in 2016, we followed the CRA guidlines. From what i'm reading now, as of 2018 because there is a single payment, I am no longer eligible to get the eligible dependent credit?

    Has anyone had to deal with this recently or any experience with this?

    help. thank you

  • #2
    Any luck clearing things up with Cra? I'm going through the same issue with them

    Comment


    • #3
      Hi,
      To give everyone an update,

      1. My eligible dependant credit was rejected because the wording in my separation agreement has a set off amount.
      2. Ive made my complaint to the cra and the have reject my claim even though there is no economic difference.
      3. I was reviewed in October, rejected in November and tried to get my separation agreement amended for 2019 to remove the set off languages. Ex had agreed to change the language, I had my lawyer send her lawyer the signed amendment and on Dec 27th, she refused to sign and wanted more money out of me by increasing S7 expenses.
      4. I am out $2600 for 2018 and 2019. And perhaps every year going forward.

      Thank you CRA for making my life miserable.

      If there are others in the same situation, please PM me we need to get the spotlight on this to the media.

      The cost if raising kids is the same in both households, rejecting it in one household solely based on the wording of set off where there is no economic difference is ridiculous.

      Comment


      • #4
        Originally posted by nofrills View Post
        we need to get the spotlight on this to the media.
        Your local federal MP might be a better place to start.

        The cost if raising kids is the same in both households, rejecting it in one household solely based on the wording of set off where there is no economic difference is ridiculous.
        You are preaching to the converted here. For a few years there was a workaround but CRA shut down that door. I'm honestly not sure why.

        Comment


        • #5
          Originally posted by nofrills View Post
          ...

          3. I was reviewed in October, rejected in November and tried to get my separation agreement amended for 2019 to remove the set off languages. Ex had agreed to change the language, I had my lawyer send her lawyer the signed amendment and on Dec 27th, she refused to sign and wanted more money out of me by increasing S7 expenses...

          CRA's "rules" on the eligible dependant credit, are ridiculous.



          What are the extra "special section 7" expenses that your ex is demanding now? Are they even section 7?


          Does your ex also claim the eligible dependant credit, or have they? Or have they never been entitled? If she wants it too, you're probably screwed.



          The rules basically say, if you're both eligible, you both have to agree who will claim it. If you don't agree, no credit for you.


          If she's never been eligible to claim it anyway - she's just a cu*t.


          I guess depending on the "return" you may get, from being able to claim it, you could try to bribe her, saying "it's a bigger return for me", so let me claim it and agree to the wording change, and I'll add x dollars to monies I send you.



          Without a wording change though, CRA is just going to keep denying you, picking apart the language used in that clause.

          Comment


          • #6
            I guess I'm a bit confused. Is it simply because ANY child support changes hand that CRA denies the credit to the support "payor"? (even though both parties are technically support payors)....

            I ask because in a few years- I might be the set off payor. If the agreement is updated and we have shared, does that mean I should say that we alternate the ability to claim the eligible dependent credit?

            Comment


            • #7
              Originally posted by iona6656 View Post
              I guess I'm a bit confused. Is it simply because ANY child support changes hand that CRA denies the credit to the support "payor"? (even though both parties are technically support payors)....
              ...
              Your wording would have to be clear that *each parent pays the other* support, and leave it at that. If they see offset, or "parent x pays offset" they will disallow the payor parent.

              Assuming both parents actually are eligible.

              Comment


              • #8
                In my case, we have two kids, in our separation agreement, she claims our daughter and I would claim our son. We share custody.

                I am denied and my ex is allowed to claim because we have a set-off in our separation agreement.

                "To satisfy each party's obligation: Father will pay Mother a set off amount z, based on a support payment of x from father to mother and a support payment of y from mother to father."

                it should have been worded
                "To satisfy each party's obligation, Father to pay x to Mother and Mother to pay Father y"

                Anyways, the Canadian Bar Association has written about this to Bill Morneau and he has maintained the CRA's position.

                https://www.cba.org/CMSPages/GetFile...e-90696c978246

                Comment


                • #9
                  My separation agreement was complete in 2016 and the CRA ruling came out in 2017.


                  I had based my separation agreement on the below example from the CRA.

                  From 2017, the CRA had this published

                  Example 2 Both parents are legally obligated to pay child support for two children
                  Nicholas and Christine share the custody of their children Sam and Amy. Sam and Amy spend 50% of their time with Nicholas and 50% of their time with Christine.
                  The written agreement states that Nicholas has to pay Christine $300 a month and that Christine has to pay Nicholas $400 a month. For convenience, Christine agrees that Nicholas does not have to write her a monthly cheque and that she will simply pay him $100 a month, which will fulfill both their support obligations.
                  Nicholas will claim the amount for an eligible dependant on line 305 of his return for Sam. Christine will claim the amount for an eligible dependant on line 305 of her return for Amy.

                  Since then, this has been removed from their website and there is no guidance on how to draft your separation agreement.

                  Comment


                  • #10
                    Originally posted by dad2bandm View Post
                    Your wording would have to be clear that *each parent pays the other* support, and leave it at that. If they see offset, or "parent x pays offset" they will disallow the payor parent.

                    Assuming both parents actually are eligible.
                    Or in my case, because my EX is ineligible as the offset payor, he told me he wasn't claiming either of the kids for the past 2 years, so I did. Unbeknownst to me, he claimed both kids, then let his deadbeat partner receive benefits for my kids. Meanwhile, I have been audited about 15 times in the last 2 years because of it. The CRA are never happy with any documentation that I happily supplied them, regardless of truth or reality, and I'm currently several thousand dollars in debt to them. While ex and his deadbeat continue to claim benefits for my kids.

                    Comment


                    • #11
                      I get you're probably just ranting about your situation, but your statement is quite unclear, in regards to this specific thread.


                      If you're talking the "eligible dependant" tax credit, your ex would only be able to claim that for one child, regardless. So he's not "claiming both" with that. If the other child is unclaimed then, if you were eligible, you could claim the other for "eligible dependant". It sounds like you're not eligible though?


                      In regards to your "ex" being the "offset payor" doesn't make them ineligible, technically, but having wording that CRA doesn't like, while being the offset payor, is the issue. The wording should not call out, the fact, that one parent is ultimately the only payor. It should point out, that both are paying support.



                      If both parents do not agree on who will claim (if they are both eligible), then CRA denies them both. Since they have not done that (it sounds like), to your ex, then there must be some other reasons at play there.


                      I'm not sure how the "deadbeat partner" would receive benefits for kids that are not theirs.

                      Comment


                      • #12
                        Originally posted by dad2bandm View Post


                        I'm not sure how the "deadbeat partner" would receive benefits for kids that are not theirs.
                        Yes, it was a rant, but everything I've said was relative. Sorry if it was confusing for your reading.

                        He is not eligible, as he pays support. I am, as I receive support (very small amount). We have shared. However, he claimed both as dependents, even after informing me he was not, so he could transfer the benefits to his partner.
                        Our patriarchal CRA automatically assumes that the female of the family is the primary caregiver. Therefore, even though she is not the parent, because she is a common-law spouse of a parent, and the lesser earner, she is considered by extension the primary caregiver and receives the CCB/OCB for our children.
                        It's messed up. I've had numerous lengthy conversations with the CRA about this. I've gone back and forth with this letter and that, this form and that, plus the separation doc that has language too ambiguous for the CRA. And of course, I couldn't exactly ask the ex for a letter the CRA wanted stating that only I would claim the kids because then his partner would miss out on my kids' benefits.
                        It seems like a loophole but it's also clearly stated on the website. Even the judge and HIS lawyer didn't believe it. And yes, it's also a rant. Because it's simply outrageous.

                        Comment


                        • #13
                          Originally posted by JAAJ2016 View Post
                          Our patriarchal CRA automatically assumes that the female of the family is the primary caregiver.
                          Just to be clear, the CRA is patriarchal because it will automatically give the money to a female over a male?

                          To paraphrase a great movie... you're using a word, but I don't think that word means what you think it means.

                          Comment


                          • #14
                            Originally posted by JAAJ2016 View Post
                            ...He is not eligible, as he pays support. I am, as I receive support (very small amount). We have shared...

                            To clarify here, you are both initially eligible here for the "eligible dependant" credit, as you have shared custody (according to you).



                            With shared custody, you are paying each other child support, technically.



                            Implementation-wise, it sounds like your ex pays the offset to you. While CRA will usually deny him then if that is specified in the wording of your order, either your wording does not raise a flag with CRA, or they just haven't flagged it. Given he is getting it, and you are not, and you've raised the issue with them, I'm guessing the wording didn't raise a flag then and there must be something else here, specific to that "eligible dependant" credit.


                            Originally posted by JAAJ2016 View Post
                            However, he claimed both as dependants, even after informing me he was not, so he could transfer the benefits to his partner...

                            Both can't be claimed for "eligible dependant" tax credit specifically.
                            But...


                            Originally posted by JAAJ2016 View Post
                            ...Our patriarchal CRA automatically assumes that the female of the family is the primary caregiver. Therefore, even though she is not the parent, because she is a common-law spouse of a parent, and the lesser earner, she is considered by extension the primary caregiver and receives the CCB/OCB for our children...

                            Yes, if you're talking about just claiming dependants on one's taxes in general (not the eligible dependant tax credit), it does sound like CRA allowed him to claim both (and that is used to decide Child Tax benefits, etc), and not you?



                            There must be something specific to the custody order you have, that would make it so. It's almost unheard of for CRA to allow all the credits to be claimed by Dad, and not Mom, in a truly equal shared custody situation, if both parents don't agree on how that will be split.

                            Comment


                            • #15
                              I won't get into the eligible dependant credit, that's been covered and the rules suck. BUT if you have shared custody of the kids, the CCB/OCB gets split, are you not getting anything for this?? Does the CTB section of CRA know it's shared custody?
                              For shared custody CRA determines eligibility for each (natural) parent based on household income and also the total number of children in the respective households. Then each parent's household gets 50% of whatever they would otherwise be entitled to. Even though the other household may have a higher income, if the "deadbeat" has other children, then they'd have different math for eligibility.

                              Comment

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