However, “a recent case from the Tax Court of Canada, Harder v. The Queen, made clear that if one parent is paying the other child support on the basis of a ‘set-off’ amount, that parent cannot claim the eligible dependent credit,” Johnston added.
Separated couples with shared custody of the children often arrange child support payments on the basis of a “set-off” between each parent’s obligations, Johnston explained. For example, if Dad has an income of $80,000 per year, he would be required to pay $1,211 in child support for two children, she added. But if the children split their time equally with Mom, who earns, say, $50,000 per year, she would also be required to pay $755 a month in support to Dad. Typically, it’s just easier for Dad to pay the difference.
That is the arrangement Haines says he currently has with his former wife.
The Harder court case has “caused family law lawyers to have to draft agreements where, to use the examples above, instead of Dad just paying the $456 set-off to Mom, Dad actually has to pay the $1,211 and Mom actually has to pay the $755. In that case, CRA will allow each parent to claim the eligible dependant credit for one child.”
Someone with Haines’ more practical child support setup, however, cannot claim the credit.
