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.