Separated parents - Can dad claim eligible dependent but mom gets CBT, GST etc

jodew · ‎February 22, 2024

my clients haven't been together for years. Mom recently remarried so she can't claim an equivalent to spouse anymore. Dad wants the benefit of claiming the child as equivalent to spouse on his taxes as he is single. His income is too high to get any benefit from CTB, GST etc so is it possible for mom to continue receiving it? Odd question... I know.

They've never had a separation or custody agreement and dad has never paid support to mom for his son.

My understanding is they would have to file a written agreement with CRA stating that dad is claiming the son but mom keeps the benefits from it. Although there is no custody agreement, it is 50/50 for the most part.

PAULJR · ‎February 23, 2024

That should be fine. We have a few clients with similar situations where one parent wants to claim the dependent even though the child/children live with the other parent. This is allowed as long as only one parent makes the claim. Based on my experience with this scenario, give the claim to the father as the mother will not be making it and most likely CRA will send out an inquiry letter requesting proof of custody and all. A written statement at the time will suffice with both parents' signatures and SIN numbers explaining that they have shared custody of the children and that he will be making the claim for that year. CCB has to be applied for separately, so making the claim on the father will not automatically qualify him for CCB unless he applies for it separately. Hope this helps.

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PAULJR · ‎February 23, 2024

That should be fine. We have a few clients with similar situations where one parent wants to claim the dependent even though the child/children live with the other parent. This is allowed as long as only one parent makes the claim. Based on my experience with this scenario, give the claim to the father as the mother will not be making it and most likely CRA will send out an inquiry letter requesting proof of custody and all. A written statement at the time will suffice with both parents' signatures and SIN numbers explaining that they have shared custody of the children and that he will be making the claim for that year. CCB has to be applied for separately, so making the claim on the father will not automatically qualify him for CCB unless he applies for it separately. Hope this helps.

jodew · ‎February 23, 2024

Thank you!!! Are there any bulletins or anywhere I can find that in writing? Mom is afraid she's going to have to back pay CTB to the ex so I want her to be able to read something about it, not just take my word for it.

PAULJR · ‎February 23, 2024

I could not find an exact bulletin on this point as this is based on my own experiences; however, there are varying sources that point you in that directly.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/suppor...

^This first link, the 2nd paragraph indicates that a clearly established written agreement must be made between both parents whereby they can decide how they will make the claim for Eligible dependent; and if they cannot agree, then nobody gets to make the claim.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

^In this link, if you click on the 2nd sub-category link to "situations where you cannot claim..." you will find that a parent paying child support cannot make the claim, so it is important to indicate that "no support payment is being made by either parents" in the written agreement.

https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview...

^This CCB eligibilty criteria page is also a good resource. It tells you who can and cannot apply and discussess custody arrangements for purposes of CCB. So long as mother and father agree that mother has custody for 60% or more of the time, she is considered having full custody for CCB purposes and will be the sole receiver. CCB is always an issue related to application more so than tax returns. An issue only arrises when two parents make separate applications on the same child. They are allowed to receive 50% each, but it would be a waste if the father applies as you mentioned that he would not get any benefit anyways with his high income. So as long as the father does not ever apply for the CCB, she will never have an issue. Her CCB qualification will come down to her own family household income in combination with her current spouse.

https://financialpost.com/personal-finance/taxes/cra-canada-child-benefit-shared-custody-parents-amo...

^An article from the financial post helping to explain the CCB in a shared custody arrangement.