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  • #61
    Originally posted by COURTISMYLIFE View Post
    Can the CCTB be used to reduce daycare costs s.7 expenses? I've been reading the posts and seems that some say yes some say no... its there a definitive answer for this?

    From everything Ive read and my interpretation of the FCSG, no. Its a S7 expense and any tax benefits for it come off the total cost that is split between parties. So if daycare costs $1200 a year and the tax benefit is $500, the net cost that is split proportionate to income is $700.

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    • #62
      Can I throw a slight twist into this? What happens if I am paying for child care "cash" and I do not claim it on my tax return? Secondly, Do we need to consider tax breaks when the payor doesn't live in this country and pays lower taxes where they reside?

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      • #63
        After tax costs

        Originally posted by Busch View Post
        Can I throw a slight twist into this? What happens if I am paying for child care "cash" and I do not claim it on my tax return? Secondly, Do we need to consider tax breaks when the payor doesn't live in this country and pays lower taxes where they reside?

        Are you the payor or the recipient? From what I understand, in a non-50/50 or off set situation or if your agreement doesnt specifically outline it, the payor gets no claim to the tax breaks. Thats why the rules say net cost. So the person paying and cant claim the tax break still gets the tax benefit. Regardless of where they live and what they pay, the support payor is still allowed the net cost of the expense unless otherwise noted (i.e. In your agreement). If you are the recipient you should still be getting a receipt for the payor. Paying "cash" could very well mean youre paying $100 but demanding $150 from the payor. Either way, collecting the tax benefit or collecting more than you're paying is akin to fraud. ETA its also fraud that your caregiver is doing it off the books. My partner refused a s7 expense because the service provider was doing it for "cash under the table" and wouldnt provide receipts. He had no proof his ex was actually paying the person. I get that you probably are getting a good daycare rate but its not fair to demand child care costs you cant prove in my opinion.

        If you dont calculate the expense that way then you have to give the proportionate share of the tax benefit you get.
        Last edited by rockscan; 04-08-2015, 09:02 AM.

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        • #64
          Originally posted by Busch View Post
          Can I throw a slight twist into this? What happens if I am paying for child care "cash" and I do not claim it on my tax return? Secondly, Do we need to consider tax breaks when the payor doesn't live in this country and pays lower taxes where they reside?
          First - Just because you don't claim the tax benefit, doesn't mean you aren't entitled to it. The ex could claim that, notwithstanding you don't claim the amount on your taxes, that the s7 expense be reduced by the tax rebate you would otherwise be entitled to. That they shouldn't be adversely affected by your decision not to claim all of your tax entitlements.

          Second - residence of the ex is irrelevant. It is the amount you pay for child care and the rebates associated with it that matter.

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          • #65
            Thank you Rockscan and HammerDad. Both of your comments make complete sense! An offer of 25% off the cost of child care would then be a reasonable offer, regardless of whether it is claimed or not?

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            • #66
              If its less than the tax rebate on the full cost of day care then yes. If not then no.

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              • #67
                Originally posted by Busch View Post
                Thank you Rockscan and HammerDad. Both of your comments make complete sense! An offer of 25% off the cost of child care would then be a reasonable offer, regardless of whether it is claimed or not?
                It depends. A CP with a higher income would get less benefit from the tax credits vs CP with a lower income. Generally I recommend doing two sets of tax returns, one with the rebate and one without. Figure out what the proportional share is for each parent and go from there. No sense making offers without knowing the numbers the offers should be based off of.

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