Taxes: who should claim

[vocircuspants]

Who should claim kids as eligible dependents in taxes? I make much more than my ex. 2 youngest are shared custody, eldest is with me full-time. She pays no child support to me for eldest (income too low).

I've heard that it's best for person with higher income to claim.

[undersc0re]

Do they live with you most of the time? Is there any court orders to show your primary care and control etc...can you prove this to the government when they ask? They will ask, most of the time during a seperation they will ask to prove your seperated and prove the children your claiming are in your care. Higher income with more to write off or claim would most likely be better. What is the whole living situation and child care situation?

[vocircuspants]

Interim agreement on shared. 50/50 for two youngest. 100% with for eldest. Primary care shared for decision making etc.

[stripes]

Are you talking about the Amount for Children ("child amount") credit? If so, I suggest you claim the child who lives with you full time plus one of the children who lives with you half time. Your ex claims the other child who lives with you half time.

As for the Amount for Eligible Dependent (I'm assuming you and your ex pay each other child support for the two kids with shared residence - "offset" - if only one person is paying CS, you won't be eligible for it) you and your ex have to come to an agreement in writing as to who will claim this. If you both try to claim it, the claim will be denied to both of you.

One way to do this is to alternate years - you claim it in odd-numbered years, she claims in even. If the credit is worth a lot more to you than to your ex, you and your ex could agree that you will claim it every year you are eligible and then kick back half the value to her. This would require a high level of trust between the parents. If the trust isn't there, alternating the credit year by year is the better solution.

Remember that if either of you remarries, you will not be eligible for this credit, so your written agreement should acknowledge that your marital statuses may change, and that should that happen, the credit will be claimed by whoever is eligible.

[vocircuspants]

Thank you. I'm the only one paying CS, because she makes (chooses to) less than 15k/yr. Is that "offset"?

[stripes]

No, offset is when parents share residence with a child (kid spends not less than 40% of the time with each parent), so in theory each parent pays the other one the table amount of child support for that parent's income, as laid out in the Federal Child Support Guidelines (e.g. Mom earns more than Dad; Mom pays Dad $700 per month and Dad pays Mom $500 per month). With offset, technically, both Mom and Dad are payors AND recipients of CS. In practice, only the difference in the amounts actually changes hands (e.g. Mom pays Dad $200 per month [$700-$500]).

With shared residence, you can only claim the AED if you are both a payor AND a recipient of CS (lots of threads on this topic - search them). If you are only paying CS and not receiving CS, according to CRA you can't make this claim. This is why your divorce order needs to be worded carefully, so that the parents pay each other CS, rather than one party paying the other.

In your situation, you can try claiming the AED, but CRA may deny it, and if you don't have that piece of paper saying you pay each other, you could be out of luck.

[vocircuspants]

Right understood. It WOULD be offset but she has too low of income.

[dad2bandm]

As already questioned, this depends on which "dependant" claims, you are trying to make.

The "Amount for children born" is one; the "amount for eligible dependant" is another. They both have specific rules, outlined for "shared custody".

In cases like these, you really need a documented agreement, that spells everything out, so CRA can't question it. Prepare to be questioned.

You mentioned this is interim; so this is a recent situation then, since you are only now asking about how this should be claimed? If it's a new claim, I would expect it to be questioned by CRA. If the eldest lives with you full-time, and you can show that, you should be able to claim that at least.

---
FYI, in my own personal circumstance;

2 children.

child 1 - shared custody, but no written agreement/order - with (at time), no cooperation from other parent, about writing up something suitable for CRA

child 2 - joint (but not shared) custody - specific court order

--
Child 2, I cannot claim for anything - as order is written that it's not technically shared custody, therefore, "primary caregiver" is Mom, so Mom claims child for everything. There is no offset support, because of this, therefore, I'm support payor, and cannot claim anything.

Child 1 though;
We have shared custody - but nothing in writing.

Mom was not on-board with sharing any claim, or deductions for child (I also went through the CCTB stuff for child 1).

However, in my case, having nothing in writing, actually helped, because when Mom disagreed with CRA on this, they had nothing to point to, to say otherwise.

So I got CCTB (shared eligibility). Further to that, Mom eventually got married. She is married, I am not. I now get "amount for eligible dependant" each year (she cannot claim). Further to that, since we have shared custody, "amount for children born" has specific rules, about who can make that claim. "the person who claims the amount for eligible dependant" will make the claim for the "amount for children born". I asked CRA to make this adjustment, and they have. It pays to know the specific rules for each claim, and to make sure CRA can't "sidestep" them.