Announcement

Collapse
No announcement yet.

Section 7 with imputed income on recipient

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Section 7 with imputed income on recipient

    Hey all....

    I've got a question regarding section 7 expenses with imputed income on the recipient.


    Ex has physical custody, and has income imputed against her. She earns ~$10,000 yr but has an imputed income of ~$30,000 yr. The difference is by her choice, she fully admitted to not wanting to work during a deposition.. it was pure gold. And a settlement was reached a few days later.


    She receives around $2,500 a month in spousal support from me. Plus about another $1,000 in child support.


    In calculating section 7 expenses, how is the tax credit for day care handled?

    Is there anyone else on the board whom has done this calculation for imputed income by the recipient?
    ie should the tax credits be calculated as if she makes $30,000 + (12x$2,500) = $60,000 as opposed to $40,000 which is a lower tax bracket, etc...


    Thanks!

  • #2
    The first thing to remember about tax credits is that if the person's income is below personal exemptions (plus any amounts for dependents) then there is NO TAX CREDIT for expenses as there is no tax paid.

    Imputed income of $30,000 may generate a tax credit, however if her actual is $10,000 she has paid zero personal income tax and therefore receives zero credit.

    Comment


    • #3
      Originally posted by MS Mom View Post
      The first thing to remember about tax credits is that if the person's income is below personal exemptions (plus any amounts for dependents) then there is NO TAX CREDIT for expenses as there is no tax paid.

      Imputed income of $30,000 may generate a tax credit, however if her actual is $10,000 she has paid zero personal income tax and therefore receives zero credit.
      Agreed and understood 100%. Do note that her taxable income is a lot higher than $10,000 since she also gets ~$30,000 yr in spousal support from me.

      However, the crux of the question is with the effect of imputed income.

      She agreed to earn $30,000 a year, and chooses not to, so she doesn't get the tax credits. So in my mind she should have to cover the lost tax credits... i can find lots of information on section 7 calcs, but none where the recipient has imputed income...
      Last edited by movingON1975; 09-15-2014, 10:11 AM. Reason: no need for bold

      Comment


      • #4
        Originally posted by movingON1975 View Post
        Agreed and understood 100%. Do note that her taxable income is a lot higher than $10,000 since she also gets ~$30,000 yr in spousal support from me.

        However, the crux of the question is with the effect of imputed income.

        She agreed to earn $30,000 a year, and chooses not to, so she doesn't get the tax credits. So in my mind she should have to cover the lost tax credits... i can find lots of information on section 7 calcs, but none where the recipient has imputed income...
        I understand the spousal support income. Depending on how many dependents, etc. the actual taxable income may be negligible.

        If she has co-habitated then these credits are also based on household income.

        My ex requested my entire tax return and the NOA in order to determine the tax credits I was receiving for S7 activities.

        Comment


        • #5
          Originally posted by MS Mom View Post
          I understand the spousal support income. Depending on how many dependents, etc. the actual taxable income may be negligible.
          One child.


          Originally posted by MS Mom View Post
          If she has co-habitated then these credits are also based on household income.
          Ah, very true, but not the case here.

          Originally posted by MS Mom View Post
          My ex requested my entire tax return and the NOA in order to determine the tax credits I was receiving for S7 activities.
          I haven't seen a return or NOA since 2011s. She refuses to show me, said its none of my business. It is good that you two can get along at least somewhat..

          Comment


          • #6
            Originally posted by movingON1975 View Post
            One child.




            Ah, very true, but not the case here.



            I haven't seen a return or NOA since 2011s. She refuses to show me, said its none of my business. It is good that you two can get along at least somewhat..

            Oh, we don't get along. He wanted all that information while denying to pay the expenses the credits were for. And, for the record, the lawyer found $9 of credits.

            Her NOA is your business. Is there not a clause in your agreement that you exchange this information annually? How do you determine how much of the expense is yours without knowing her income?

            Comment


            • #7
              Originally posted by MS Mom View Post
              Oh, we don't get along. He wanted all that information while denying to pay the expenses the credits were for. And, for the record, the lawyer found $9 of credits.

              Her NOA is your business. Is there not a clause in your agreement that you exchange this information annually? How do you determine how much of the expense is yours without knowing her income?
              Found 9$ of credits, in how many billable hours?

              I agree that the NOA is my business, there is only a clause that i will give her my NOA for a child support change, which she has been foot dragging on since June. I'm letting the NOA sleeping dog lie until I see that she is working.

              Comment


              • #8
                Originally posted by movingON1975 View Post
                Found 9$ of credits, in how many billable hours?

                I agree that the NOA is my business, there is only a clause that i will give her my NOA for a child support change, which she has been foot dragging on since June. I'm letting the NOA sleeping dog lie until I see that she is working.
                I'm guessing the billable hours on that task was in the region of 3 - over and above the case conference argument for disclosure of this document. I advised his lawyer he could have the whole $9 on payment of the expenses.....he wasn't interested. LOL

                Comment

                Our Divorce Forums
                Forums dedicated to helping people all across Canada get through the separation and divorce process, with discussions about legal issues, parenting issues, financial issues and more.
                Working...
                X