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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 09-06-2019, 08:20 PM
nofrills nofrills is offline
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Default 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
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Old 01-19-2020, 02:01 PM
Daddyof2 Daddyof2 is offline
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Any luck clearing things up with Cra? I'm going through the same issue with them
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Old 01-19-2020, 09:11 PM
nofrills nofrills is offline
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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. I’ve 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.
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Old 01-20-2020, 01:55 PM
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Janus Janus is offline
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Quote:
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.

Quote:
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.
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Old 01-20-2020, 03:05 PM
dad2bandm dad2bandm is offline
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Quote:
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.
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Old 01-20-2020, 05:53 PM
iona6656 iona6656 is offline
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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?
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Old 01-20-2020, 06:06 PM
dad2bandm dad2bandm is offline
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Quote:
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.
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Old 01-20-2020, 09:39 PM
nofrills nofrills is offline
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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
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Old 01-20-2020, 09:53 PM
nofrills nofrills is offline
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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.
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Old 01-26-2020, 10:53 PM
JAAJ2016 JAAJ2016 is offline
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Quote:
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.
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