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  • Child tax benefits

    If there is no child support payable by either parent, what is required in the order for both parents to be entitled to benefits? This is regarding a shared custody arrangement.

    How does CRA handle both parents being elligible ?

  • #2
    Child support is always due. The quantum might be zero though. Just follow the normal procedure:

    "Mom pays dad $521, and dad pays mom $521. For convenience the parties agree that these amounts offset for this year and therefore each party will instead transfer a sum of $0 to each other."

    I find it unlikely that the amount is actually zero unless both parents have the same salaried position with the same years of experience.

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    • #3
      Originally posted by Janus View Post
      Child support is always due. The quantum might be zero though. Just follow the normal procedure:

      "Mom pays dad $521, and dad pays mom $521. For convenience the parties agree that these amounts offset for this year and therefore each party will instead transfer a sum of $0 to each other."

      I find it unlikely that the amount is actually zero unless both parents have the same salaried position with the same years of experience.
      This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.

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      • #4
        Originally posted by blinkandimgone View Post
        This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.
        So what is the required wording?

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        • #5
          Originally posted by blinkandimgone View Post
          This used to be an acceptable standard however CRA has taken to rejecting this wording over the past few years. The updated info is not a flat out mom pays dad X amount and dad pays mom X amount. They have also taken to demanding proof that the payments changed hands and the money did not only flow one way, even if it makes sense for an offset anount.

          Oh, that's right! I had not heard anyone else complaining about recently so I had figured that CRA had quietly dropped that ridiculous stance. I assumed we would have a much higher number of irate people on this forum if CRA was still pulling that crap.


          For tunnellight, maybe agree that you each pay $1 per month, and then pay each other $12 per year? If CRA is still doing this, it is a bit of a wild west situation and we don't really know what would work...

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          • #6
            I have 50/50 and no child support paid.

            We each receive 50% of what we would have based on household income. They audited and we had to prove we had 50/50- each parent had to provide proof they were on the school registration, receipts from extracurriculars showing our address, letters from daycare etc.


            Sent from my iPhone using Tapatalk

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            • #7
              https://globalnews.ca/news/4184196/e...d-benefit-cra/

              However, “a recent case from the Tax Court of Canada, Harder v. The Queen, made clear that if one parent is paying the other child support on the basis of a ‘set-off’ amount, that parent cannot claim the eligible dependent credit,” Johnston added.

              Separated couples with shared custody of the children often arrange child support payments on the basis of a “set-off” between each parent’s obligations, Johnston explained. For example, if Dad has an income of $80,000 per year, he would be required to pay $1,211 in child support for two children, she added. But if the children split their time equally with Mom, who earns, say, $50,000 per year, she would also be required to pay $755 a month in support to Dad. Typically, it’s just easier for Dad to pay the difference.

              That is the arrangement Haines says he currently has with his former wife.
              The Harder court case has “caused family law lawyers to have to draft agreements where, to use the examples above, instead of Dad just paying the $456 set-off to Mom, Dad actually has to pay the $1,211 and Mom actually has to pay the $755. In that case, CRA will allow each parent to claim the eligible dependant credit for one child.”
              Someone with Haines’ more practical child support setup, however, cannot claim the credit.

              https://www.canlii.org/en/ca/tcc/doc...?resultIndex=1

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              • #8
                Ok. So that all makes sense and should be no issues if both parents comply.

                What happens one parent doesn't pay their child support? Can opposite parent stop paying or only pay the difference because the other stopped paying ? Would CRA monitor all this to ensure correct amounts are actually being paid by both parties?

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                • #9
                  Originally posted by tunnelight View Post
                  What happens one parent doesn't pay their child support? Can opposite parent stop paying or only pay the difference because the other stopped paying? Would CRA monitor all this to ensure correct amounts are actually being paid by both parties?

                  From what blink is saying, CRA will monitor to the extent that you need to show proof that the funds have been transferred, failing which they will deny your tax credit.


                  As you pointed out, the major issue here is the potential for one parent to stop paying. The closer the incomes, the bigger the issue. Probably the only enforcement would be through the courts, or maybe FRO?


                  It is just a terrible ruling by the CRA, I have no idea why they are actually doing this, beyond possibly an urge to screw over fathers.

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                  • #10
                    I realize this thread is a few years old, but I did my best to search the topic before starting new thread.

                    When the CS is supposed to be offset, do BOTH parents pay eachother the amount of CS they are supposed to pay? For example, I give her the table amount for my income according to the guideline at $550/month, and she in turn gives me her amount according to her income at $300/month? Or is money only exchanged one-way by my giving her the $250 difference?

                    Is one method more preferable over another? Any implications on taxes or CCCB?

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                    • #11
                      You pay the difference. Otherwise there is no guarantee she will pay you.

                      Your agreement should specify how the dependent credit and baby bonus is split. For instance every odd year to one parent, even to the other.


                      Sent from my iPhone using Tapatalk

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                      • #12
                        Originally posted by LovingDad1234 View Post
                        I realize this thread is a few years old, but I did my best to search the topic before starting new thread.

                        When the CS is supposed to be offset, do BOTH parents pay eachother the amount of CS they are supposed to pay? For example, I give her the table amount for my income according to the guideline at $550/month, and she in turn gives me her amount according to her income at $300/month? Or is money only exchanged one-way by my giving her the $250 difference?

                        Is one method more preferable over another? Any implications on taxes or CCCB?
                        One method is preferable over the other.
                        In 2015 the tax laws changed to only allow the payee to be able to make certain claims.

                        There is a thread somewhere on here where the poster went to court to get the court order to state that spouse A had to pay $x and spouse B had to pay $x. The judge wrote the order for them.

                        From what I understand all it takes is a $1 CS payment per month (year?) to qualify for claiming. So if you don't want to get into it get the $1 a month in support and offset it with increasing your payment by $1.

                        Call the CRA, it is a mess talking with them but you might get relevant sections if you are persistent.

                        Comment


                        • #13
                          With regards to the Eligible Dependent Credit, I was re-assessed and my claim was rejected because I had a set-off amount. However, I made two appeals to the CRA and on the second appeal, they granted my appeal because my separation said "to satisfy both parties obligation to pay child support". CRA told me that you need to clearly state that "both parties have a legal obligation to pay child support".

                          Even though my agreement had a set-off, it stated both parties had a legal obligation to pay child support. Do not use any "set-off" language it will raise flags like it did for me.

                          Make it super clear, you need to explicitly state
                          i) party 1 is legally obligated to pay party 2
                          ii) party 2 is legally obligated to pay party 1.

                          hope this helps
                          btw my appeal just came through last week so this is still fresh for me.

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                          • #14
                            Thanks for the response, excellent answer! I will simply continue to pay the Table amount as I normally do, and when the time comes for offset, I will continue with the Table amount and indicate that she is now expected to pay me the Table amount as well, according to her income. This will likely cause pushback. If she does not pay, I will file a motion for CS after a short period of negotiation, and ask for costs.

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                            • #15
                              Do yourself a favor and pay the full amount you owe and have your ex pay you the full amount they owe . Off set is a bad term in this case. Ive been there and CRA will not budge on the issue.

                              Comment

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