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Spousal Equivalent for CRA

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  • Spousal Equivalent for CRA

    Here is the situation.
    Separated Jan 9, 2009.
    A couple of Temporary Consent Orders.
    Have 3 children. 1 is no longer "child of the marriage"
    For the other two we have "joint custody" with ex having "primary residence". My access is under review due to a court ordered assessment. I do not currently enjoy more than 40% access.
    I would like to be able to claim one of my children as "equivalent to spouse" on my Income Tax documents.
    If I were to get my ex to agree to allow me to claim one of them, what are the implications to her?
    I would assume her CTC would be reduced but not sure?
    It would certainly put me in a better position financially due to the tax implications.
    She is asking / threatening a motion for Section 7 expences. We just had a case conference and the Judge suggested rather strongly that she should be careful in moving forward with a motion due to my financial situation, in that I am running at a loss of about $2K per month. There is just no more money right now. I do realize that I should be contributing to some of these expences and I thought that this might be a way of "making" extra money to fund this request.
    Does anyone have any thoughts?

  • #2
    I don't know too much about this. But I would think if you each claim one child for equivalent to spouse then tax wise that would be the most savings between you. There is not much of a deduction when you claim a second child.

    I'm sure someone has a much better answer for you though.

    Comment


    • #3
      Do you pay any CS? If yes, you may not be able to claim your child as Equivalent to Spouse. My ex claims our son as her dependent even though she does not spend a dime on him and does not pay me any CS. In 2007 we both claimed him as our Equivalent to Spouse - I don't know about her claim but mine was allowed. She did claim him again for 2008.

      You can anonymously call CRA tax help line and ask for their advice.

      Comment


      • #4
        Yes, I do currently pay child support.
        I am hoping in the next couple of months to get the kids 40% which means that there would be off setting cs which means neither of us could claim equivalent to spouse?

        Comment


        • #5
          Originally posted by Cobourg View Post
          Yes, I do currently pay child support.
          I am hoping in the next couple of months to get the kids 40% which means that there would be off setting cs which means neither of us could claim equivalent to spouse?
          CRA no longer looks to see if you paid CS or not. If you have shared custody, meaning that you have the child between 40 and 60% of the time, you can claim "equivalent to a spouse". They changed it sometimes in 2009, so it's still new and you won't find a lot of information online.

          The reasoning is that with shared custody, you're both technically paying CS.

          If you have two children, you can both claim one. And, I believe this would mean you can both claim CCTB/UCCB for one child each.

          Comment


          • #6
            IF I don't end up with them 40% of the time, and if I can get my ex to agree, could I still claim the equivalent of spouse?

            Comment


            • #7
              Originally posted by Cobourg View Post
              IF I don't end up with them 40% of the time, and if I can get my ex to agree, could I still claim the equivalent of spouse?
              if she agrees to it (in writing) then YES! It shouldn't matter if you don't have the child more than 40%. If you look at the differences in savings between her claiming both kids, and each claiming one, she would see that there will big a bigger savings if you each claim 1 child. You could always offer to split the part of ther refund relating to it as an incentive.

              Comment


              • #8
                That is exactly what I was hoping to achieve.
                Not sure if I will be talking to someone who is willing to listen and participate in the process or the usual bitter ex that is extremely difficult to get along with at the best of times.

                Thanks for the help and info. We will see what happens.

                Comment


                • #9
                  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.

                  Comment


                  • #10
                    Just read this on the Divorcemate website. If you go down to page 4, they say you can allocate the benefits to one parent. And, that CRA will not actively pursue it.

                    <cite>www.divorcemate.com/library/SharedParenting.pdf
                    </cite>

                    Comment


                    • #11
                      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

                      Comment


                      • #12
                        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.

                        Comment


                        • #13
                          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.

                          Comment


                          • #14
                            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.

                            Comment


                            • #15
                              They are the government...as long as there is agreement from the parents They won't waste time trying to find out the details.

                              Comment

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