Tax Court of Canada

Family Law

Father failed to engage exception in s. 118(5.1) of Income Tax Act (Can.)

Taxpayer father and mother separated in 2011 and had two children under 18 years of age. Pursuant to consent order, father and mother had joint custody of children in shared parenting arrangement. Father had obligation to pay child support to mother for both children and mother had obligation to pay child support to father for both children, resulting in set-off requiring only father to make child support payments. Order specifically permitted mother to claim child tax credit for both children for first six months of year and father for last six months of year, and each of father and mother to claim one child as equivalent to spouse. Minister of National Revenue disallowed father’s claimed non-refundable tax credits relating to eligible dependant and eligible child respectively. Father appealed. Appeal dismissed. Father failed to engage exception in s. 118(5.1) of Income Tax Act (Can.). Utilization of set-off mechanism did not render, memorialize or transform each distinct value in mathematical calculation in determining final child support payment into support amount under Act. Engagement of combined effect of s. 118(5) and (5.1) of Act required mandatory and actual periodic payments by both spouses to each other in cases of shared parenting of two or more children, demonstrated by documentary and evidentiary record.

Harder v. R. (Sep. 14, 2016, T.C.C. [Informal Procedure], Randall S. Bocock J., 2014-3977(IT)I) 270 A.C.W.S. (3d) 442.

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