Separated or divorced with kids? 7 things to know about your taxes
If you’re a parent that’s going through a separation or a divorce, we know that things can get complicated quickly. From legal fees to claiming your kids as dependants, there’s lots to figure out. We’ve answered seven questions about how your new situation could affect your taxes, and what you’re able to claim on your return.
1.Can I claim my legal fees?
If you took on some legal fees to figure out the amount of support you’re entitled to, you can claim them against them against your income. On the flip side, if you have legal fees as a result of negotiating your support payments, you’re allowed to claim those, too. You can also claim legal fees that you took on to collect late support payments. However, you cannot claim legal fees incurred for obtaining the divorce or separation agreement or establishing custody or visitation rights. In addition, the person who is paying the support payments cannot claim legal fees.
2.I’m paying child support. Can I still claim my child as a dependant?
If you’re paying child support, you can’t claim your children as dependants on your return, except in the year of separation, assuming you would have otherwise qualified. You also can’t claim a deduction for your child support payments, unless the court order or agreement is dated prior to May 1997. Even though it might not be deductible on your taxes, you still need to indicate the child support amounts you paid.
3.I have primary custody of our child. What can I claim?
Single parents with primary custody can claim the amount for an eligible dependant (sometimes called equivalent to spouse) for one child. You may be asked to prove custody by the Canada Revenue Agency (CRA), and you should be able to provide documentation that shows that your child resides with you.
4.I have joint custody of one child. What can I claim?
Unfortunately, the amount for an eligible dependant can’t be split, so you and your child’s other parent need to decide who will be claiming it. The good news? You can take turns, and alternate who makes this claim over the years. Make sure you don’t get your wires crossed, because if you both claim it, then the CRA can disallow both.
5.I have joint custody of two children or more. What can I claim?
Parents with joint custody and two or more children can each claim the amount for an eligible dependant for one child.
6.How do childcare expenses work?
You’re allowed to claim childcare expenses for the days that you have custody of your children, so it’s easier to keep childcare expenses separate where possible. Let’s say you’re paying all the childcare expenses, but only have the children three days a week, you wouldn’t be able to claim any costs of the other two days.
7.My child turned 18 this year. Can I still claim him or her as a dependant?
You can still claim the amount for an eligible dependant if your child was 17 at some point during the tax year.
We know that this stage of life is already pretty complicated. Among other things you’re likely working out with your ex partner or spouse, negotiating how your children will be claimed as part of your separation or divorce agreement is easier to do now, rather than when you’re filing your return. If the CRA does request any additional info to confirm claims for your child, remember to provide it to them within 30 days to avoid any issues down the road.
Have more questions about making your claims correctly? Stop by an H&R Block and chat with a Tax Expert. Ready to file? Visit a tax expert at an H&R Block office near you, or do it yourself with our free online software.