FREQUENTLY ASKED QUESTIONS
IS ALIMONY (SPOUSAL SUPPORT) TAXABLE?
Alimony (“spousal support”) that is payable on a regular basis is taxable for the recipient and tax deductible for the payer, as long as there is a judgment or written separation agreement that formalizes the alimony that is being paid. If alimony is paid as a “lump sum” however, it is neither taxable for one nor deductible for the other. In cases where alimony is paid, in whole or in part, to third parties (for example, to a landlord to cover the rent), such payments are not taxable for the recipient nor deductible for the payer – unless special provisions of the Income Tax Act are invoked!
IS CHILD SUPPORT TAXABLE?
Fortunately for some, and unfortunately for others, child support payable pursuant to a written separation agreement or judgment of the court, after May 01 1997, is no longer taxable for the recipient, nor deductible for the payer.
For child support agreements and judgments rendered prior to May 01 1997, both recipient and payer may file a declaration to make the payments tax-free for both of them.
DEDUCTIBILITY OF LEGAL FEES INCURRED TO CLAIM OR COLLECT SUPPORT
The Canada Revenue Agency allows you to deduct legal fees incurred to increase support, to defend against a claim to decrease support, or to collect unpaid support. Fees to establish child support for the first time are also deductible. Fees for the divorce itself are not tax-deductible.
Revenu Québec has the same rules save that the payor of support (rather than just the recipient, as in the case for the Canada Revenue Agency) can also deduct legal fees relating to the establishment or modification of support.
HOW SHOULD I NEGOTIATE ALIMONY WITH MY SPOUSE?
Before engaging in a costly court battle over alimony, spouses who are discussing amicably how to settle their separation or divorce, or spouses who go into mediation, should concentrate on the same kinds of factors the Court will consider if they cannot solve the problem themselves.
SUPPORT PAYMENTS - WHEN ARE THEY TAXABLE OR DEDUCTIBLE?
Child Support Payments are never taxable for the recipient nor deductible for the payer, as long as the originating court order or agreement is later than May 1st 1997. Court orders or agreements prior to May 1st 1997 are subject to the old rules (taxable and deductible).
Spousal Support Payments which are payable in the “ordinary” fashion (payable weekly or monthly, by one spouse to the other spouse, without restrictions on the use of the money), are taxable for the recipient and deductible for the payer.
WHAT IS ALIMONY (SPOUSAL SUPPORT)?
During marriage, spouses owe each other respect, fidelity, succour and assistance, and they contribute to the expenses of the marriage in proportion to their respective means (articles 392 and 396 of the Civil Code of Quebec). Upon separation or divorce, spouses owe each other financial support. If one spouse is in financial need, often by reason of the role he or she assumed in the marriage, then the spouse who is better off will owe alimony (spousal support) to the spouse in need.
WHAT ARE GROUNDS FOR DIVORCE IN QUEBEC?
Our current Divorce Act is a federal law which has been in effect since February 1986, and is applicable throughout Canada. It is the Constitution of Canada that requires that Parliament set the conditions for marriage and divorce, to be administered equally in every province and territory of our country. In each province, there is a designated court that has the jurisdiction to deal with divorce and all its ramifications.
WHAT IS CHILD SUPPORT?
When parents separate, whether or not they are married, in a civil union, or have no formal ties at all, both of them must financially support their children.
No matter whether the parents are married and so are in divorce proceedings (under our federal Divorce Act), or are merely separating (under our Civil Code of Quebec), or are dissolving their civil union (also under our Civil Code of Quebec), or finally, are not in any formal union, and so are just taking plain old custody and child support proceedings (yet again under our Civil Code of Quebec), the rules are the same!
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The Canada Child Benefit (CCB) is a tax-free monthly payment made to the custodial parent(s) of children under the age of 19. To be eligible, the parent(s) must be Canadian residents or citizens, they must live with the child and be mainly responsible for the child’s care and upbringing. Both parents must file income tax returns so that the Canada Revenue Agency (CRA) can calculate the benefit and send payment.
The Regulation respecting the determination of child support payments lays out the process of determining child support payments for parents who both reside in Quebec.
The Civil Code of Quebec (CCQ) provides all the general rules, rights and obligations among people with a residence, domicile or some other legal connection to the province of Québec.
The CCQ treats everything from property rights, last wills and testaments, civil liability and all kinds of different civil contracts (e.g. insurance, transport, loans, etc).
The Canadian constitution provides that the federal government has jurisdiction with regard to power over marriage and divorce, though there is some overlap with provincial jurisdictions with respect to various rules flowing from marriage (such as rules regarding the celebration of marriage) and divorce (such as partition of family property).
The Code of Civil Procedure (CCP) provides all the technical rules that apply within the province from the moment you take legal action: How to serve the defendant, where to deposit your proceedings, when time delays begin and expire, right up to how to execute seizures and appeal judgments.
If your children have been removed from the country of their habitual residence, you have recourse to have them returned to their home country, by international law rules that apply in Quebec.
The Statement of Income and Expenses and Balance Sheet (Form III) is a form that helps the Court determine the financial means and needs of divorcing spouses so it can make an order with respect to spousal support (alimony).
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