British Columbia Family Law Blog

People need to remember that since 1997 child support payments are not tax deductible by the paying spouse while spousal support payments are.

It is important that any agreements or court order ensure support amounts are differentiated as to child and spousal support. In Elcich v. R., the Tax Court disallowed deductions, pursuant to s. 56.1(4) of the Income Tax Act, which deems undifferentiated support amounts to be child support.  The effect of such a rule means you could lose important tax deductions and end of paying or receiving more than what was bargained for.