People need to remember that since 1997 child support payments are not tax deductible by the paying spouse while spousal support payments are.
It is important that any agreements or court order ensure support amounts are differentiated as to child and spousal support. In Elcich v. R., the Tax Court disallowed deductions, pursuant to s. 56.1(4) of the Income Tax Act, which deems undifferentiated support amounts to be child support. The effect of such a rule means you could lose important tax deductions and end of paying or receiving more than what was bargained for.
Hello, My ex seems to disagree with the family laws and revenue Canada. We have our 2 children 10 & 12 years of age jointly 50/50 scheduele. My pay is greatly less than his. We sadly ended up having to go to court to have the Judge make an order. He is to pay 8 years spousal support and 8 years child support unless theres material change, to me for both children. His beef is he feels he should be only paying for child support for 1 child as we have joint custody. So he can declare 1 child on his taxes. he is trying to get me to agree to this and lower the amount of child support I will be recieving. I see where he is coming from. He is on stress leave now. Did this in the past also, stress leave from his job. I need to know what to do. What do couples do in this situation. The court made an order and he signed it as he represented himself. What is fair?