SPOUSAL AND CHILD SUPPORT PAYMENTS

Receipt of Child Support:

• Child support is not taxable income.
• Although not taxable, if payments are made under a court order or written agreement requiring periodic payments, the amount that should have been received must be reported, even if less or no amount was actually paid.

Receipt of Spousal Support:

• Spousal support is taxable income if payments are periodic and made under a court order or written agreement.

Payment of Child Support:

• Child support payments are not deductible.
• A parent paying child support cannot claim the eligible dependant credit for that child.^[1]  But if the parents pay child support to each other, one parent may claim the credit.^[2]
• If the child qualifies for the Disability Tax Credit, the unused amount cannot be transferred to a parent who is paying child support.

Payment of Spousal Support:

• Spousal support payments are deductible if they are taxable to the recipient, and therefore they must be periodic and payable under a court order or written agreement.^[3]
• To claim the deduction, the order or agreement must be registered with the CRA using  Form T1158.^[4]

UFile steps if spousal and/or child support was received:

1. In Interview setup, go to Parents and children and check the box for Alimony or support payments.
2. Click the plus sign beside the appropriate option and complete the required sections.

For support payments received, UFile requires two entries:

• “Total support payments received in [tax year] (including the non-taxable child support expected for [tax year])”
  → Enter the sum of:

1. Actual spousal support received, and
2. The amount of child support the person was supposed to receive, even if the full amount was not paid.

• “Non-taxable child support expected for [tax year]”
   → Enter the amount of child support that was supposed to be received, regardless of whether it was actually paid.

Example:
Suppose a wife was owed $5,000 in spousal support and $5,000 in child support. The husband paid $7,500 in total. In this case:

• The total entered is $10,000 (support owed).
• The non-taxable child support expected is $5,000.
• Taxable income is $7,500 – $5,000 = $2,500, reported on Lines 12799 and 12800.

UFile steps if spousal and/or child support was paid:

1. In Interview setup, go to Parents and children and check the box for Alimony or support payments.
2. Click the plus sign beside the relevant option and complete the required sections.

For support payments made, UFile requires two entries:

• “Total amount of support payments made in [tax year]”
  → Enter the total of both spousal and child support actually paid.
• “Non-deductible child support payable for [tax year]”
  → Enter the amount of child support that was required to be paid, even if some or all of it was not actually paid.

Example:
Suppose a husband was obligated to pay $5,000 in spousal support and $5,000 in child support. He actually paid $7,500 in total. In this case:

• The total entered is $10,000 (support payable).
• The non-deductible child support is $5,000.
• His deductible amount is $7,500 – $5,000 = $2,500, reported on Lines 21999 and 22000.

Special situations requiring additional guidance before completing UFile:

• A spouse paid back-support (i.e. amounts owed for a previous tax year).
• Lump sum payments were made in advance of a court order or written agreement.
• A spouse was in child support arrears prior to tax year.
• Payments are made to or from a non-resident.

References:

• Income Tax Folio S1-F3-C3, Support Payments
• CRA webpage - Support payments
• Income Tax Act, reporting income: s.56(1) and 56.1(1)
• Income Tax Act, s.56.1(4) - meaning of “child support payment” and “support payment”.
• Income Tax Act, deduction: s.60(b)
• Income Tax Act, s.118(5) - credits.
• Disability tax credit transfer