Basics of Family Law
Child Support
How will child support payments affect my taxes?
Changes to the federal Income Tax Act mean that all child support orders made on or after May 1, 1997, fall under new income tax rules. Now:
- if you are the parent paying child support, you cannot use your child support payments as a deduction on your income tax, and
- if you are the parent receiving child support, you do not have to report the child support as income - which means you do not have to pay tax on the child support payments.
If you have a child support order or agreement made before May 1, 1997, and you want the current income tax rules to apply to your order or agreement - but you do not want to change the amount of your child support payments - you can do so if both you and the other parent agree. You and the other parent will simply need to sign a special form, called an "Election for Child Support Payments," and submit it to the Canada Customs and Revenue Agency. The form is available from any revenue office (check the blue pages of your telephone book), or on-line from the agency.
If you want to change to the current tax rules but the other parent does not, you can apply to the court to change your current child support order or agreement. Remember, however, that in almost all cases, the judge must apply the child support guidelines to any new order. That means your child support payments could be either increased or decreased, even though you only wanted the tax rules to change. Before you apply to the court, you may want to check what your child support will be under the guidelines. It may turn out that you will be better off with your current order or agreement, even though the old tax rules apply.
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