Divorce and separation result in two separate households with different tax consequences. The
law is confusing and expert advice should be sought.
The following are the general principles.
Child support is not taxable nor can it be claimed as an expense.
Spousal support is tax deductible by the person paying it and must be claimed as taxable income by the person receiving it. Shared parenting relationships (where, perhaps both parents have access or physical custody over 40% of the time) creates special problems that should be addressed in separation agreements and court orders in order to maximize the benefit for both parties. To avoid problems in the future, especially with respect to the Canada Child Tax Benefit, the agreement or order should address the issue of who will receive this credit and set out the period of access or custody for both parents.
There are other tax issues that require careful consideration by both parties and sound advice upon which the parties should act.
Phone us at 519-256-9500
Please note: If you are involved in a matrimonial dispute, we
strongly recommend that you retain a lawyer to represent
you at the first possible opportunity;
This site and this note are designed only to acquaint you with a
few (and only a few) of the issues that may affect you.
It is not intended as legal advice on any specific case.
You are well advised to retain the services of an
experienced lawyer as soon as possible.
Let us represent you
Pearce Ducharme Family Law
For an appointment phone us at 519-256-9500
For an appointment call 519 256 9500