SUPPORT PAYMENTS

Support paid to a former spouse or common-law partner can be deductible to the payer and taxable to the recipient, but only if it qualifies as spousal support under specific rules. Child support under agreements made after April 1997 is neither deductible nor taxable. Payers claim support on line 22000, and recipients report it on lines 12800 and 12799.

REQUIREMENTS FOR DEDUCTIBLE SPOUSAL SUPPORT

• Paid under a written agreement or court order.

• Payable on a periodic basis (regular, ongoing amounts), not as a lump sum.

• Paid to a spouse, former spouse, common-law partner or the parent of the payer's child, while living apart because of a breakdown of the relationship.

• The recipient has discretion over how the money is used.

CHILD SUPPORT PRIORITY

If an agreement or order specifies both child and spousal support and the payer does not pay the full amounts, payments are applied first to child support. Only payments beyond the required child support for the year can be deducted as spousal support.

THIRD-PARTY PAYMENTS

Payments to third parties, such as mortgage payments or tuition, can qualify if the written agreement or order specifically provides for them and states that subsections 60.1(2) and 56.1(2) of the Income Tax Act apply.

REGISTRATION

Agreements or orders made or changed after April 1997 that include child support should be registered with the CRA on Form T1158 so that the tax treatment is clear.

NOT DEDUCTIBLE

• Lump-sum payments, including payments of arrears that relate to earlier years (although the recipient may elect special averaging).

• Legal fees for establishing or negotiating support (fees to collect or enforce support may be deductible by the recipient on line 23200).

• Voluntary payments made before an agreement or order, unless the agreement specifically covers them and is made by the end of the following year.

EFFECT ON CREDITS

A person who pays support for a child generally cannot claim the eligible dependant amount for that child, unless both parents pay support to each other for children in shared custody and agree on who claims it.