Tax Court of Canada


Tax

Income Tax

Tax credits

Child tax credits could not be prorated for taxation year

Taxpayer and then wife had one child. Relationship broke down and parties divorced. Parties lived separately, with taxpayer maintaining marital home and sharing custody of child. In 2010, parties were granted joint custody, with child’s primary residence with wife; taxpayer was to pay $331 monthly in child support. In 2013, wife moved 150 kilometres distance from child’s friends and school. Taxpayer and wife agreed that child’s primary residence would change to be with taxpayer at taxpayer’s home and support amounts would cease. In 2014, consent order was issued to reflect this agreement. Taxpayer testified she had “verbal agreement” prior to 2013 with wife that instead of making monthly support payments, taxpayer would pay all expenses for child and would reimburse wife for any expenses she incurred for child. Taxpayer claimed dependent and child tax credits under ss. 118(1)(b) and (b.1) of Income Tax Act for 2013 taxation year. Minister reassessed denying claims. Taxpayer appealed. Appeal dismissed. It was clear 2010 order required taxpayer to make monthly support payments in respect of child; that order remained in effect until issuance in August 2014 of consent order which forgave any arrears in respect of support payments. However, when wife decided to move, child either already was living primarily with taxpayer, or child commenced to live with taxpayer in 2013 with wife’s impending or actual move. Monthly payment of support amounts as provided by 2010 order continued to be paid for some periods of months in 2013, approximately until wife moved in that year, sometime between April and September. With this factual conclusion, no statutory language used in or in connection with s. 118(1) indicated the deductions could be prorated for taxation year, noting in contrast with other provisions in Act by which Parliament explicitly provided for proration. Since under order taxpayer was required to make support payments in 2013, Minister was correct in denying claim for child support related tax credits.

Cook v. The Queen (2017), 2017 CarswellNat 5083, 2017 TCC 188, B. Russell J. (T.C.C. [Informal Procedure]).

 


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