Is child support taxed?
Question & AnswerIs child support taxed?
Child support gets paid before spousal support
If you're paying both and , the money for the child must always be paid first. There is no tax deduction on that money.
The Canada Revenue Agency considers anything you pay over and above the child support amount in your or to be spousal support. You can claim a tax deduction on that.
This means missing even one child support payment can affect the amount you will have to pay in income tax.
Example: Bill's separation agreement says he must make monthly payments of $400 ($4,800 a year). Of this, $250 (or $3,000 a year) is child support. And, $150 (or $1,800 a year) is spousal support. Bill pays $400 a month from January to August, for a total of $3,200. Then he stops making payments for the rest of the year.
When Bill files his tax return, $3000 of the $3,200 he paid will be treated as child support payments. He will only be able to deduct $200 for spousal support.