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-   -   Child tax benefits (https://www.ottawadivorce.com/forum/showthread.php?t=22213)

tunnelight 12-13-2018 01:38 AM

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 ?

Janus 12-13-2018 07:41 AM

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.

blinkandimgone 12-13-2018 09:43 AM

Quote:

Originally Posted by Janus (Post 232615)
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.

tunnelight 12-13-2018 09:46 AM

Quote:

Originally Posted by blinkandimgone (Post 232617)
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?

Janus 12-13-2018 02:09 PM

Quote:

Originally Posted by blinkandimgone (Post 232617)
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...

mom22girls 12-13-2018 04:15 PM

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.


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blinkandimgone 12-13-2018 05:04 PM

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

Quote:

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 parents 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, its 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

tunnelight 12-14-2018 12:40 AM

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?

Janus 12-14-2018 09:15 AM

Quote:

Originally Posted by tunnelight (Post 232630)
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.

LovingDad1234 10-06-2020 03:34 PM

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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