For couples that have recently separated it takes a while before the dust settles and both parties go about their own business. Then tax time arrives and who gets to claim what starts upsetting what was becoming an amicable agreement.
One of the big issues is money that may have been made to the spouse that the paying party believes are support payments. You need to know if these are going to be classed as spousal support or child support because the tax rules that are applicable are different for each one.
The first thing you need to determine as the person paying are the payments in fact classed as support payments. To determine this there is a set criteria that those payments must meet:
To be qualified as a spousal support the payments have to have been ordered to be paid by a court order or written agreement and they are only for the purpose of the spouse’s maintenance.
To qualify as child support the payments must be as such that they do not appear in any court documents or written agreement that they are only identified as being for the child’s maintenance. If the court order or agreement is dealing with one set amount that is to be paid as support for the spouse and the child, then that set amount is considered as support for the child.
A support payment must meet the following criteria….
There has to be a court order or written agreement in place regarding the payments, and the terms of the agreement regarding the payment must be being followed.
The person paying must be living separate and apart (because of a relationship breakdown) from the recipient if this person is the payer’s current or former spouse of common-law partner. If this is not the case then the payer must be deemed as the legal parent of the recipient’s child.
The money being paid is for either the maintenance of the recipient, their child or both. The person receiving the money can use the money at their own discretion.
These must be periodic payments and in accordance with a time schedule that has been set out in the court order or written agreement.
The payments must go directly to the recipient.
If you are dealing with a paternity agreement it must be issued by a court or tribunal that is accepted by the province. A written paternity agreement is not sufficient on its own.
There are exceptions to the above criteria, and if you are dealing with spousal issues when it comes to your tax filing you really would do well to utilize the services of a qualified accountant. This could potentially save you from getting into a lot of unnecessary hassles with your ex-partner and prevent you from completing your taxes incorrectly.
