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Typical handling of SS/CS and Tax Credits

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  • #16
    Originally posted by Soiled View Post
    Yeah it's a poor system for split families with only one kid. Less of a headache in my situation where there are two kids, so we each just claim one and don't have any issue.
    You'd think the CRA would want it split as well.

    Equiv to spouse amount renders the ex in this case with essentially zero income, which means no taxes and higher benefits. For the other party, it's just a deduction on income.

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    • #17
      Originally posted by MS Mom View Post
      You'd think the CRA would want it split as well.

      Equiv to spouse amount renders the ex in this case with essentially zero income, which means no taxes and higher benefits. For the other party, it's just a deduction on income.
      Yeah, but when the ex claims it in the situation your asking about, it's deducting income at the lowest tax bracket whereas if your friend claims it, it is likely at a higher tax bracket, 'costing' the government more money when the deduction is used by him.

      It follows the same logic as when a family is claiming child care. The lower income spouse is supposed to claim it. The deduction is then worth less to you due to tax brackets, and saves the government some money.

      If they get along well enough to cooperate on those things the smart thing to do would be to have him claim it, and split the refunf and any increase, if any, in benefits. Fortunately for the pockets of the CRA alot of people can't work together with their ex well enough for that sort of thing.

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      • #18
        So I am actually going through this right now in Ontario. My tax court date is October and so far CRA has denied all my appeals because they do not seem to consider offset support as being that " both parents pay ". We have 50 - 50 custody for 2 kids and the third lives with me exclusively .
        I tried to get my ex to sign an agreement further clarifying our lawyer prepared separation agreement but after much stalling she declined as she is afraid that CRA will try to re-coup her last 2 tax refunds and all the new CCTB payments she has received .

        Can anyone tell me exactly what hoops you had to jump through to prove the 50 - 50 custody etc .

        Letters from doctors, dentists , school ?

        anything else ?

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        • #19
          The technicality is in the wording - it needs to say person A pays person B and person B pays person A.

          In your case though if the 3rd kid lives with you exclusively you can use her for equivalent to spouse credit.

          For the other child benefits, i am fairly sure that is split 50/50 no matter what.

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          • #20
            Understood that it has to do with the wording . Mine happens to say

            " to satisfy each parties obligation to pay child support in accordance to the guidelines and based on income of X and Y , father will pay to mother Z "

            Being in a vulnerable state at the time and very new to the whole separation scene , it did not dawn on me that the lawyer was not writing this correctly , because later on in the agreement she wrote

            " mother may claim CTB and GST/HST credits for the first 6 months of the year and father may claim CTB and GST/HST credits for the latter 6 months "

            Further along in the agreement it states

            " the parties may each claim the eligible dependant credit for one child " and in the event that only one child qualifies for the eligible credit, mother shall claim in even numbered years and father in odd numbered years "

            It is obvious to anyone reading it what the intentions of both parties was and the onus should have been on the lawyer to make sure their form letter documentation was current and correct .

            Do I just need to sit tight and hope that logic prevails or do I have to nudge CRA in the right direction ?

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            • #21
              CRA makes a killing on this technicality. But it could be worse, these rules, even though very troublesome and error prone didn't even exist until 2011.

              Prior to that, CRA did not recognize shared custody or allow any splitting of benefits. They always defaulted to giving 100% to the woman.

              You NEED to explicitly say that you are both paying for CRA to recognize shared custody. Amend your agreement or get a new one.

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              • #22
                Agreed. I have already drawn up an amendment with the correct language but of course my ex will not sign it and ignores me every time I bring up the subject. I have asked her to get her lawyer to look it over etc. but nothing . She thinks if she signs it, she will have to pay back the last 2 years worth of tax refunds and credits that she received .

                Can I ask the courts to add the amendment without her signature ?

                Looks like I already will have to go to FRO to get the CS for the one son who lives exclusively with me .

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                • #23
                  Well, she's right. If she received thousands of dollars of government benefits to which she was not entitled because the children were in a shared custody arrangement, she WILL have to repay all of the money to CRA. That's what happens when you scam the system and get caught, or don't do your due diligence when signing legal agreements.

                  You can have the order easily amended by a judge with or without consent. You're just asking to clarify the terms, not changing anything. If she forces you do go to court over something so ridiculous you may be entitled to have her pay your costs.

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                  • #24
                    Good to know. Thank you for the advice

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                    • #25
                      I don't think the wording matters for government benefits.

                      The wording ONLY matters for the equaivelnt to spouse credit

                      Comment

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