sharing after-tax costs of S7 expenses

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stripes

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A quick question - does anyone know where in the FCSG (or elsewhere) it is stated that parents share the *after-tax*, or net, costs of S7 expenses, not just the gross ones? I know it's out there somewhere, but I'm having trouble locating it.

I am doing up an S7 reconciliation to send to the ex, want to explain I am reimbursing him partially for his contribution to our daughter's after-school care expenses (I paid 94% of her total costs but got the entire receipt in my name and claimed the maximum amount [$4000]. He paid 6% of the total costs, so I am therefore reimbursing him 6% of the value of the tax deduction I got).

I want to be fair and reimburse him what he deserves, but I also want to ground this in the law so he doesn't think I'm inventing arbitrary amounts of money to give him (and thus could be induced to give him more).
 
Subsidies, tax deductions, etc.
(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense. O. Reg. 159/07, s. 2.
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Family Law Act ONTARIO REGULATION 391/97 CHILD SUPPORT GUIDELINES

Section 7 (3)
 
Thank you Mess. I noted that the quote you provided was from Ontario legislation while I'm in Alberta, so I googled a couple of the key phrases adding the word "alberta" to see if I could find the applicable provincial legislation. My search led me right back to this site (surprise surprise!) and a post by SingingDad which contained an excerpt from the relevant Alberta legislation. I'm not sure how to link to another thread, but if anyone else from Alberta is looking for this info, you can find it if you search for a thread titled "Child tax benefit, does it offset Section 7", and look for SingingDad's second post on 1-27-2013. I'm guessing all the provinces have similarly worded legislation.

Thanks again.

(I've noticed quite a lot of Albertans on this site - could there be something in our our boom-and-bust-and-boom economy that kills marriages???)
 
Just fyi, the child support guidelines are federal legislation that is incorporated into each province's family law legislation.
 
That's what I figured. I just wanted to have chapter and verse for Alberta so I could attempt to make it clear to ex why I am reimbursing him this particular amount.

(His argument will be that we have to split the financial benefits of S7 expenses - the value of the childcare deduction - in proportion to income, so he gets 47% of the value of the deduction and I get 53%, regardless of what we each paid towards the costs. I'm not sure where he gets that from - if anyone has encountered this logic before, I would be interested in hearing about it. My argument is that we split the financial benefits of S7 expenses in proportion to what we contributed to the actual costs, so that if he paid 6% of the child care costs [as was the case in 2012], he receives 6% of the value of the deduction. In other words, we share after-tax or net costs, and the tax deduction is incorporated into the determination of that net cost, rather than being a "goodie" that we have to split some other way, like some form of marital property. I'm not holding my breath waiting for him to agree with this, I'm mainly just laying down a paper trail. Fortunately, for 2013 and going forward, we have agreed to split child care costs in proportion to income, with each of us receiving a separate tax receipt, so I'm hoping this will be a one-time problem).
 
You should split the net cost of s7, after any tax deductions or subsidies or private insurance.

What I mean, in terms of medical costs over $100, these are s7. So you would obviously split the cost after insurance payouts. If the amount is tax deductable, you would further calculate the tax deduction and split the net cost.

Now, let's say that you have shared custody and are both able to deduct child care costs. The limit on child care is $7000 each per child. (*It may be updated, I am going by a couple of years ago.) Now, say that the total daycare costs for one child were $10,000, which can be true for an infant in full-time care at a registered daycare with university educated ECE caregivers.

So, in such a case, you should each claim the amount that gives the highest return.

Now, say you earn a lot less than your ex. Let them claim the first $7000. This is possible with shared custody. This deduction will be at their marginal tax rate, which is the highest rate they pay. Probably well over 30%. Now you claim the remaining $3000, and get a return at your marginal tax rate.

This way you are maximizing your tax savings. The net amount you pay, after tax refund, should be amount you split proportionate to income.
 
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