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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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  #11  
Old 01-07-2010, 02:21 PM
billiechic billiechic is offline
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read this. Don't know if it makes things any clearer though.
http://www.cga-canada.org/en-ca/AboutCGACanada/CGAMagazine/2003/Jul-Aug/Pages/ca_2003_07-08_dp_taxforum.aspx
  #12  
Old 01-08-2010, 09:25 AM
Mess Mess is offline
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Quote:
Originally Posted by Foredeck View Post
I do believe you need shared custody in order for CRA to accept it.

By CRA's standard, there is no difference between having your for 5% of the time or 39% of the time.

I am sure you could sign an agreement with your ex that states you have shared custody and allowed to both claim one child as a dependent, but that CS payments will remain what they are now.

I am not sure if this would be accepted by CRA if you were audited.
The CRA doesn't ask for copies of custody orders. They also don't check where your kids are sleeping at night (the exact words of clerk on the CRA help phone line).

As long as the two parents are in total agreement about their arrangement, then the CRA won't police it. I've been told by my accountant that it would be a nightmare for them to try to police the custody and access of children across the country.

They would flag a situation where there seemed to be too may claims being made for one child, or if one parent disputed the level of access of the other parent.

So basicly, if you were audited, they don't audit your child's bedroom at night. It's up to you to decide to tell them if you are at 39% or 40%, as long as the other parent agrees.

I do believe that if you change access levels it gets a bit trickier, and they do write follow up letters asking for clarification but they don't ask for custody orders. I did get a letter from them asking for confirmation of my daughter's residency (over 60% with me, so considered 100%) and they wanted me to mail them a photocopy of her birth certificate, as though that "proved" anything.
  #13  
Old 01-08-2010, 12:24 PM
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dadtotheend dadtotheend is offline
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Quote:
Originally Posted by Mess View Post
The CRA doesn't ask for copies of custody orders.

I do believe that if you change access levels it gets a bit trickier, and they do write follow up letters asking for clarification but they don't ask for custody orders.
OH YES they do!! I've seen it many many times.
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Old 01-08-2010, 12:53 PM
Foredeck Foredeck is offline
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If there's a dispute between the two parents, CRA would investigate it further.

However, everything seems to indicate that if both parents stay quiet, CRA will not waste ressources investigating anything and will let people "abuse" or bend the rules slightly on this for now.
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Old 01-09-2010, 12:55 PM
billiechic billiechic is offline
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They are the government...as long as there is agreement from the parents They won't waste time trying to find out the details.
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Old 01-12-2010, 02:58 PM
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So basically, in everything I'm reading, CRA won't dispute a shared parenting situation unless one of the parents disputes the claim? We found out that we were going to get the CCTB (after the children being with us 50% of the time for two years), and a month later we got a letter stating that they were reviewing the case and to provide a large amount of information (had previously sent the custody orders). So, CRA really doesn't care, it's the other parent (who is obviously losing half of the CCTB) that is creating the case? Even the person we spoke to at the CCTB was shocked to see it being reviewed one month after being approved.
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Old 01-12-2010, 05:00 PM
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Yup, it's all about the other parent contesting it. Although it would have been smoother if you'd both signed a letter agreeing to the facts of the situation, that's what my ex and me did. But what you've done isn't "wrong" and this will have to work itself through and your ex will look like an ass.
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Old 01-12-2010, 05:30 PM
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I have to disagree.....in my case right now as I write, my ex and I are going through exactly the same thing. She received "the letter" from CRA requesting details and written confirmation of our arrangements which is 50/50 week to week. For no apparent reason.

She receives all benefits relating to the children and I agree with it 100%. I sent a letter of confirmation on her behalf confirming this. I want her to continue to receive all benefits possible other wise I will most certainly end up picking up the slack out of my pocket.

It seems that more and more people are being ask for clarification on this, thus losing benefits.

A decision has not been made yet although if it is the law I suspect they will have no choice but to split the benefits. Not happy about that!
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Old 01-13-2010, 01:19 PM
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Quote:
Originally Posted by Mess View Post
Yup, it's all about the other parent contesting it. Although it would have been smoother if you'd both signed a letter agreeing to the facts of the situation, that's what my ex and me did. But what you've done isn't "wrong" and this will have to work itself through and your ex will look like an ass.
Smoother I agree! However we knew that the ex would never agree (obviously, as it's being contested now!), so just jumped in. Thanks!
  #20  
Old 01-13-2010, 09:39 PM
LivedThroughIt LivedThroughIt is offline
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I asked my accountant to look into this and he secured an opinion from CRA on how this works.

Essentially if you file your tax return with anything listed under Child Support Payments you will be sent a letter asking for a copy of your separation agreement. Payors cannot claim for the child they are paying for.

If you want to do it, and you have multiple children, you can arrange your separation agreement in such a way that you are paying your spouse support for some of the children, and she is paying you for some of the children, and then you can both claim one of the children you are not paying for.

Frankly I think the whole thing is a fantastic bloody mess and I don't know what the heck CRA is thinking in this. It seems to me they took the easy way out by barring payors from claiming the credit and it's just another way to weight the child support tables in favour of Mom's with sole custody. Life these days is far more complicated than this.

Here is the body of the letter my accountant received from CRA you are interested in scenario #3:

(I had to trim this post substantially because there's a size limit on posts)

Source:
CCH Tax/Federal Income Tax/Tax Window Files/Tax Window Files/2000s/2001/July/
Child Support
July 06, 2001
Window On Canadian Tax Commentary
Income Tax Act: 56(1)(b), 60(b), 56.1
Interpretation Bulletins: IT-99R5, Legal and Accounting Fees (Consolidated); IT-530, Support Payments
Information Circulars: IC 70-6R4, Advance Income Tax Rulings
Please note that the following document, although believed to be correct at
the time of issue, may not represent the current position of the Department.


In respect of scenario 1A, which involves sole custody of both children by
Mom and an agreement or order that requires Dad to pay child support for both
children, in our view, Mom is entitled to the equivalent-to-spouse amount and
Dad is not.
In scenario 1B, which involves sole custody of both children by Mom, the
agreement or order requires Dad to pay child support only for Dave and does
not provide for child support for Jane. As it is unclear how in the
circumstances only one child would be entitled to support and whether the
"wholly dependent" requirement in paragraph 118(1)(b) of the Act is met, we
are unable to comment.
In scenario 2, which involves sole custody of Dave by Mom and sole custody of
Jane by Dad (split custody), the agreement or order requires Dad to pay child
support to Mom for Dave and requires Mom to pay support to Dad for Jane, with
the support payments being offset and the difference being paid by the parent
with the liability for the higher support amount to the other parent. In our
view, both Mom and Dad may be entitled to claim the equivalent-to-spouse
amount, Mom for Dave and Dad for Jane.

In scenario 3A, which involves each of Mom and Dad having each child for more
than 40% but less than 60% of the time (shared custody), the agreement or
order requires Mom to pay a specified amount of child support for both
children and Dad to pay a higher specified amount of child support again for
both children. The payment of these two support amounts is effected by Dad,
whose liability for support is higher, having to pay Mom the difference (i.e.,
net amount) between the two support amounts. In our view, assuming that the
order or agreement imposes a liability on Mom and Dad for their respective
specified child support amount (as opposed to one liability being imposed on
Dad for the net amount), neither Mom nor Dad would be entitled to claim the
equivalent-to-spouse amount.
In scenario 3B, which involves the same custody arrangement as in scenario
3A, the agreement or order simply requires Dad to pay a specified child
support amount (which is equal to the net amount paid by Dad in scenario 3A)
for both children and does not require Mom to pay any child support. In our
view, Mom may be entitled to claim the equivalent-to-spouse amount for either
Dave or Jane while Dad cannot claim it for either child.
In scenario 3C, in which, as you stated, the "custody arrangements are
identical to scenario 3A above, except that the agreement or order provides
that, although custody is shared, Dad shall have primary custody of Jane and
Mom shall have primary custody of Dave," the order or agreement provides for
payment arrangements as in scenario 3A, except that the specified amount of
child support to be paid by Dad is specifically for Dave and that to be paid
by Mom is specifically for Jane. We presume that your reference to "primary
custody" is to the amount of time spent by the child with a particular parent,
as opposed to that parent's right to make major decisions affecting the child.
In our view, assuming that the order or agreement imposes a liability on Mom
and Dad for their respective specified child support amount (as opposed to
one liability being imposed on Dad for the net amount), Mom may be entitled to
claim the equivalent-to-spouse amount for Dave and Dad, for Jane.

We trust that the foregoing comments are of assistance.
Yours truly,
Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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