Filing taxes will be even more complicated for parents who separated or divorced in 2012. There are specific rules about how to claim your children and for spousal support. Here are some factors to consider:
- Legal fees: If you incurred legal fees to establish the amount of support you are entitled to, you may be able to claim them against this income. You are also able to claim legal fees that increase the amount of your support payments. This includes legal fees for child support payments even though child support payments are not included in income. You can also claim legal fees incurred to collect late support payments.
- Child support: If you pay child support, you cannot claim your children or the amount for an eligible dependant except in the year of separation, assuming you otherwise qualify. You also cannot claim a deduction for your child support payments unless the court order or agreement is dated prior to May 1997. However, even though it may not be deductible, you still have to indicate the amount you paid.
- Primary custody: Single parents with primary custody can claim the amount for an eligible dependant (sometimes called equivalent to spouse) for one child. They can also claim the child amount both for that child and any other children under 18.
- Joint custody, two children or more: Parents with joint custody and two or more children may each claim the amount for an eligible dependant for one child along with the child amount. They must decide between them who will claim the child amount for any additional children.
- Joint custody, one child: Unfortunately, the amount for an eligible dependant cannot be split, so the parents will need to decide who will claim it. It can be claimed in alternate years. If both parents claim it, then the CRA can disallow both. The same parent will claim the child amount.
- Proof of custody: If you are claiming the amount for an eligible dependant, you may be asked to prove custody by the CRA. You should be able to provide some kind of documentation that the child resides with you.
- Child Tax Benefit: The CRA will split the Child Tax Benefit between parents with joint custody.
- Childcare expenses: You are allowed to claim childcare expenses for the days that you have custody of the children. So, if you are paying all the childcare expenses but only have the children three days a week, you cannot claim the other two days.
- Turning 18: The amount for an eligible dependant can be claimed if the child is 17 at some point of the year. Unlike the child amount, the child does not have to be younger than 18 for the entire year.
If possible, it is best to negotiate how the children will be claimed as part of your separation or divorce agreement. It is better to have a clear understanding before you try to complete your tax return.