How do I claim spousal support?

A client of mine got divorced and was required to make child and spousal support payments.  We claimed the spousal support as a deduction and reported the child support in previous years.  Last year the children were not attending school so the child support stopped.  We continued to claim the spousal support as before, however, CRA did not allow the deduction as child support was not paid.  (This does not make sense to me, but it was CRA’s answer.)  For the client to claim the support, they would need to get a new divorce agreement indicating that there is no need for child support.  This may cost more in legal fees than the benefit of the tax deduction.

 

The question my client has is:  should they pretend to pay the child support and continue to deduct the spousal support? Or should they not claim the spousal support (as income for the recipient or deduction for the payer)?  I expect that if we claim the spousal support but not the child support the deduction will be disallowed but the income will continue to be counted effectively double taxing the same income.


Answer

The client was not "claiming" child support as a deduction.  However, in Profile you have to include the child support on the Support input screen and indicate that zero is tax deductible.  CRA checks to see that the child support is paid using this screen.  In the past year, no child support was paid because the children were over 18 and not attending school.  However, the divorce agreement did not specify an end date for the child support and so CRA claims that the child support should continue to be able to claim the spousal support.  Is something seriously wrong here, yes.  I cannot understand why CRA disallows the spousal support because the child support was not paid.

The question is what to do in the future.  Should the client (and ex-spouse) lie, indicating that child support was paid for the client to get the tax deduction for spousal support?  Or should the client just not claim the deduction for spousal support.  If the later, will CRA follow-up and assess the ex-spouse as receiving the spousal support even though the client did not claim the deduction?  (This is effectively what happened last year.)

Was this answer helpful? Yes No
1 additional answer

No answers have been posted

More Actions

People come to ProFile for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: