Claiming child support and maintaining certain benefits add complexity
Upon separation, couples need to file their updated marital status with the Canada Revenue Agency . To avoid confusion, both spouses need to give the CRA the same separation date and have proof on hand that they’re living at separate addresses or separate quarters of the home, says Renée le Nobel, chartered professional accountant and collaborative divorce expert in Vancouver.If there are dependant children involved, Ms.
“In shared parenting arrangements with two children, each household can claim the credit by assigning a different child to each parent,” Ms. le Nobel says.Spousal support is tax-deductible for the spouse providing the money, says Blair Corkum, certified financial planner at Corkum Financial Planning Inc. in Charlottetown. That’s non-negotiable, regardless of what’s written in the couple’s separation agreement.
Ms. le Nobel says the CRA tends to audit spousal support deductions, asking clients to submit their payment receipts or cancelled cheques. She notes that many clients pay the support via electronic transfer, but they need to ensure the recipient’s name is on the receipt to comply with the CRA. The receipts should be set up like an invoice and have both spouses’ names on them, she adds.
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