Stating Tax benefits in separation agreement

[Daddyof2]

Hi All,

I'm new here so I apologize in advance if this question is repeated however, after reading so many threads i'm lost.

My STBX and I have had a long 3 year ugly separation, two kids who unfortunately were dragged into this madness. We have been to three long mediation sessions, CC and SC and nothing has been done. We are finally getting somewhere but the finances are killing it

Does anyone have an exhaustive list of how to account for all the tax credits and benefits she is receiving? Our incomes are similar so its 50/50 however this is excluding section 7 expense tax benefits.

From what I understood,
- Children's arts or Fitness tax credit: eligible expense - 15% refundable tax credit => remainder shared 50/50
- Daycare expenses and eligible medical expenses reduced by the Marginal tax rate in Ontario which is 20.05%???? Then the remainder is shared 50/50?
- Eligible dependent tax credit, where do we account for that?

Any help to get this in writing would be great. Also, does anyone have an extremely exhaustive list as to what support payments cover? I was in school when separated, income imputed to the max, paying CS according to the unfair income but STBX is throwing all these ridiculous expenses my way and I really can't afford it.

Thank you,
Daddy of 2 little guys

[Desperate_Dad]

All this stuff changed in the Liberals budget of 2016.

Here is a link to the budget's relevant section for you. It also includes a handy calculator to help you calculate the benefit for the new CCB.

Budget 2016: Chapter 1 - Help for the Middle Class

In addition the the childrens art and fitness credit is being halved for 2016 and eliminated completely in 2017.

As far as the eligible dependant credit goes, see this link

Line 305 - Amount for an eligible dependant

You can have this accounted for on your taxes by completing a revised TD1 (federal and provincial) and submitting it to your employer.

The TD1's are found at this link.

TD1 forms for 2016 for pay received on January 1, 2016 or later

Trust this helps.

[Desperate_Dad]

You also asked about marginal tax rates.

Marginal Tax Rate means the extra percentage of tax you pay at certain income levels.

The current marginal tax rates can be found at this link.

TaxTips.ca - 2015 and 2016 Personal income tax brackets and tax rates for Canada and provinces/territories

[rockscan]

Stating Tax benefits in separation agreement

The federal child support guidelines state net cost of expenses. So the person getting the tax benefit is only paid the proportionate share of the net cost.

Example: arts activity...$500 gross; less the $50 = $450; 50% is $225. You pay $225.

OR...if kid pays a portion...$500 - $50 - $50 (kids portion) = $400 - 50% = $200 is your portion.

Other people have stated in here wording on how to claim eligible dependent in odd or even years. CRA are difficult on this one.

ETA you didnt mention if youre 50/50. That complicates some calculations. If you are, you can share the tax benefits for eligible dependent. If not, she claims it. If you are, you split the extra costs. If not then the "extraordinary" aspect comes in. You have to figure what her income is with cs payments. For the most part stupid little expenses like pizza day is not an expense. Things like hockey if kids played it before divorce are. Theres no exhaustive list. Daycare (or something in place of daycare like summer camp activities) and medical costs are always s7. The rest is given the reasonable test against whether you could afford it before. You can say no.

[Daddyof2]

Hi All,
Thanks for the help, we do not share the children 50/50, she has the majority of the time so she is the only one who can claim them, hence the problem trying to figure out how to split things in light of all the tax credits.
Her gross income is around $44k + $8000 in CS. Figuring out how to divide the eligible dependent credit is tough

[stripes]

I believe that if the children reside primarily with Mom and you do not have a setoff CS situation where you pay each other child support, you are not eligible to claim the AED - only Mom is. This information is in the link to line 305 provided by Desperate_Dad. You can't really split or share the AED because you aren't eligible.

[Links17]

There is a software in Quebec that calculates the net disposable income of each parent.... it is called Aliform, there must be an ontario equivalent...