10 June 1998 External T.I. 9811845 - MEANING OF "PARENT" AND "CHILD"

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether a person who has custody of a minor child, under an interim custody order, is entitled to claim a) the equivalent-to-spouse tax credit, b) the GST tax credit, c) the tuition and education tax credit, and d) the child tax benefit, with respect to that minor child

Position:

a) yes, provided only one person makes the claim and all persons entitled to claim the credit agree, b) yes, however it is restricted to only one claimant, c) yes, if the student designates that person in writing for the transfer of the tuition and education credits, and d) yes, for every month at the beginning of which that person resides with and primarily fulfills the responsibility for the care and upbringing of the child.

Reasons:

Extended meaning of child and parent, under section 252 of the Act, includes the relationship between a minor child and a person who has legal or factual custody. This would include custody under an interim custody order.

XXXXXXXXXX 981184

N. Mondou, M.Fisc.

June 10, 1998

Dear Madam:

Re: Tax Credits on Interim Custody

This is in reply to your letter dated February 14, 1998, in which you requested our views as to the availability of tax credits or benefits for a minor child while an interim custody order is in place. You would like to have information about the equivalent-to-spouse, the goods and services, the tuition and the education tax credits, as well as the child tax benefit for a six-year old child.

The situation outlined in your letter involves an actual fact situation that concerns another taxpayer. The confidentiality provisions of the Income Tax Act (“the Act”) expressly prohibit any official of this Department from releasing to any person any taxpayer information, unless the taxpayer specifically authorizes it. Therefore, we can only offer the following general comments.

For the purposes of this letter, we assumed that no support payments are made to the person who has the custody of the child.

Equivalent-to-Spouse Tax Credit

In order to claim the equivalent-to-spouse tax credit, an individual must meet the conditions set out in paragraph 118(1)(b) of the Act.

Generally to qualify for this tax credit, an individual must support in a residence that is lived in and maintained by the individual, a person who is:

a) resident in Canada, unless the person is a child of the individual,

b) wholly-dependent for support on the individual, or on the individual and other persons, if any, who maintain the residence,

c) related to the individual, and

d) under 18 or dependent because of mental or physical infirmity, unless the person is a parent or grandparent.

For the purpose of the Act, two persons are “related” to each other if they are individuals connected by blood relationship, marriage or adoption. Persons are, for example, connected by blood relationship, if one is the child of the other. Paragraph 252(1)(b) of the Act extends the meaning of “child” to include a person who is wholly-dependent on the taxpayer for support and of whom the taxpayer has, or immediately before the person attained the age of 19 years had, in law or in fact, the custody and control. “Custody” in general terms, involves the right of determining the residence, protection, care (physical, mental and moral), education and religion of a minor child.

The equivalent-to-spouse tax credit cannot be claimed by more than one individual for the same person or for the same residence. Moreover, the claim cannot be shared by having individuals each claim a portion of the credit on their returns, even if there is an agreement to share the claim. If the individuals are unable to agree as to who should claim the tax credit, neither can claim the credit.

You will find more details about this tax credit in paragraph 11 to 30 of the enclosed Interpretation Bulletin IT-513R (“Personal Tax Credits”).

Goods and Services Tax (“GST”) Credit

The GST credit can be claimed under section 122.5 of the Act by a person who is the parent of a “qualified dependant.” A “qualified dependant” includes a person in respect of whom a personal tax credit is claimed (i.e. for instance, the equivalent-to-spouse tax credit) by an individual or his or her spouse, or the child of the individual residing with him or her at the end of the year.

Assuming that the minor child would be in the custody of a person under an interim order at the end of the year, that person could be entitled to claim the GST credit, if the other requirements of the Act are met.

Also, subsection 122.5(5) of the Act provides that only one individual can make a claim for the GST credit. Finally, the GST credit is subject to certain income limits. We are enclosing a copy of page 11 of the 1997 General Income Tax Guide that provides more detailed information in this respect.

Tuition and Education Tax Credits

We wish to bring to your attention that these tax credits are available only with respect to courses of programs that are at a post-secondary school level. In general terms, there is no tax assistance available in respect of a child’s education where the child is only 6 years old.

Child Tax Benefit

The child tax benefit is available in a given month to the person who, at the beginning of that month, meets the conditions set out in the definition of “eligible individual” in section 122.6 of the Act. To claim this benefit for a child, the claimant must, among other things, reside at that time with the child and be the “parent” who primarily fulfills the responsibility for the care and upbringing of that child.

Because of the extended definition of “child” mentioned above, a “parent” will include a person who, under an interim custody order, has custody of a minor child at the beginning of a given month, provided the other requirements of the Act are met.

Attached page 6 of the 1997 General Income Tax Guide will provide you with general information in this respect. You will find more details in our Guide T4114 (“Your Child Tax Benefit”), which can be obtained from the tax services office of your area.

We trust that these comments are of assistance.

Yours truly,

J. F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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