How am I able to claim the dependent deductions?
The decision of Harder v. The Queen 2016 TCC197 dealt with the Appeal of a Child Support Order in which there was shared parenting. Mr. Harder earned more money than his ex-wife, and the two shared the parenting of their children. As a result, following Federal Child Support Tables for Alberta, Mr. Harder paid a simple offset amount, that being the difference between the total amount of child support he would pay to his ex-wife, less the amount she would pay to him. As a result of this arrangement, Mr. Harder was denied the ability to claim one of the children as an eligible dependent, and he Appealed.
The Court found the wording in the Income Tax Act declared that no amount could be deducted from child support. If a party is not a recipient of actual child support, then that party cannot claim a child as an eligible dependent. Simply put, if a party was not receiving support from the other, then the net payor could not claim a child as a dependent.
On September 14, 2016, the Court found the argument sympathetic in that the payment of offset support was a simple calculation for convenience. Rather than following through with this common-sense approach, the Court urged Family Law Practitioners to show flexibility in wording orders so that each party paid support to the other.
Prior to this decision, it had been the general practice of the Family Law Bar to include an offset calculation for convenience sake. Following the ruling of the Court, this process is no longer sufficient.
As a result, if you are a net payor of child support in a shared parenting arrangement, and you wish to claim one of the children as a eligible dependent, you will have to do the following:
- Have your Court Order, or Agreement worded so that each party pays support to the other.
- Have an actual exchange of cheques in those amounts showing payments.
If you are having difficulties in processing these claims our family law experts would be more than happy to assist you in re-wording either your Agreement or Court Order.