Canada Revenue Agency & Divorce
Divorcing? If so, changing your marital status can have significant tax implications, and failure to report those changes could negatively affect you!
Kelowna Divorce Mediation Services receives many inquiries regarding Canada Revenue Agency’s (CRA’s) rules for divorcing couples. Often these calls come after CRA has already started to claw back and/or have stopped the benefits. The result can be much time, effort and cost spent to rectify the problem and to prove one’s case to CRA.
Certain tax credits, such as the CCTB (Canada Child Tax Benefit,) are calculated based on total household income, and separation and divorce changes that. The Child Tax Benefit is a tax-free, monthly benefit payable to eligible parents for each child who is under the age of 18. It is designed to help families with the cost of raising their children. Here is what the Canada Revenue Agency has to say about it:
“If you or your new spouse or common-law partner have children who are residing with you, the CRA will move all the children to the female parent’s account. If you are married or living common-law with a person of the same sex one of you will receive the CCTB for all the children. To continue receiving the CCTB, you have to file a tax return every year, even if you have not received income in the year. If you have a spouse or common-law partner, they also have to file a tax return each year.” http://www.cra-arc.gc.ca/bnfts/mrtl/menu-eng.html
There is a lot more to it than what is quoted above. At best, it’s complicated and the rules change from time to time . In fact the Canadian Bar Association has produced a pamphlet called the “ Tax Matters Toolkit ” (updated March 2014) in order to help both lawyers and their clients understand how divorce affects taxation and taxable benefits. You can download a pdf of the pamphlet by clicking HERE .
Filing your taxes can be confusing after a separation or divorce, especially if spousal support or child support payments are involved. If you need help in figuring this stuff out, don’t hesitate to give us a call here in Kelowna, and if you live in the lower mainland or on Vancouver island, give Island Divorce Solutions a call at (250) 208-7788.
Kelowna Divorce Mediation Services
We are a local company serving the British Columbia Okanagan Valley since 2009. We are open by appointment Monday – Friday from 10:00 am to 4:30 pm, and Saturdays/evenings when required.
Call us today at (250) 707-0928 to get started, or request a consultation.
