S7 Expenses folded into Monthly CS?

[DHTO]

Hello,

My ex wants to estimate the annual S7 expenses and average that into the monthly payment. I.e. if CS is 1,000 per month with my share being 1,200 of annual S7 expenses, she wants me to pay 1,100 per month.

I would prefer to pay my proportionate share upon receipt of the expense. The reason is that she is not very forthcoming when comes to reconciling actual vs estimated expenses, and I don't want to have a conflict situation.

Also, the tax benefit accruing to her for child care expenses is substantial. Should I be paying the gross amount now and settling up when I see her tax return? Estimating the benefit to her, send my share of the net amount and let her deal with cash flow issues until she gets her tax return?

I'm pretty sure that if she owes me money after she gets her refund it will be an effort to get her to agree to an amount.

[pinkHouses]

Document when she didn't provide bills for S7 expenses.

Hijack: If you are paying 1/2 for daycare of sports or whatever who gets the tax return benefit on that?

Lets say someone was 100% on the hook for those expenses, the ex signs the kid up for sports and makes a small profit.

[DHTO]

Document when she didn't provide bills for S7 expenses.

Hijack: If you are paying 1/2 for daycare of sports or whatever who gets the tax return benefit on that?

Lets say someone was 100% on the hook for those expenses, the ex signs the kid up for sports and makes a small profit.

Tax benefit goes to the parent with the lower income. However, the funny anecdote is that with the Ontario Child Care Subsidy, it actually benefits me more to have her claim the credit (credit is indexed to payor's income).

My question was more of can I insist on keeping the S7 payments separate from the monthly CS.

[rockscan]

Yes you can insist on having it separate. Most of the times the amount is included is when a payor refuses to pay so it is added to ensure payment.

A simple no will suffice. This way if she wants her money, she has to provide a receipt.

As for the tax benefit for child care, do a dummy return and see how much it would be. I am sure it isn’t that much but still it comes off the gross amount which is then split proportionate to income.

[DHTO]

Yes you can insist on having it separate. Most of the times the amount is included is when a payor refuses to pay so it is added to ensure payment.

A simple no will suffice. This way if she wants her money, she has to provide a receipt.

As for the tax benefit for child care, do a dummy return and see how much it would be. I am sure it isn�t that much but still it comes off the gross amount which is then split proportionate to income.

Thanks - I will do that.

It's shocking how much of a tax credit ex will get. First off, the amount (up to $5K per child) gets taken off taxable income...so 20% right there. Then the Ontario CARES credit gets factored in, which is approximately 60% OF THE COST. Plus for 2021, Ford has tacked on an addtional 20% increase to the CARES credit.

So the September before school child care cost of $500 gets reduced to about $60 of net cost, of which I pay 72%. Depending on ex's final 2021 taxable income, it could get reduced even further...

[rockscan]

I would still do a dummy return if I were you or see if there is an online calculation to help. Just because it reduces her taxable income doesn’t mean it’s a credit off the cost. We ran into this with my husband’s calculation for school expenses. You can claim up to $5000 but truly the amount that was subtracted was about $500.