Payments made before the date of the court order or written agreement
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Payments made before the date of the court order or written agreement
An amount paid before a court order or written agreement takes place or comes into effect is recognized if the order or agreement states that any amount previously paid is deemed paid under the order or agreement. However, the payments must be made in the year the order or agreement was made, or in the preceding year.
Example – Amount paid before a written agreement
Since the couple separated in January 2014, Brendan has been paying $500 monthly to Sarah in spousal support. On January 8, 2016, a written agreement was established confirming that Brendan is required to pay $500 monthly in support.
The written agreement also indicates that the amounts paid before January 2016 are considered paid and received under this agreement.
The payments made in 2015 and 2016 are considered support payments because they were paid in the year of the written agreement and the previous year. Brendan may deduct the payments for 2015 and 2016 in the year the amounts were paid and Sarah will include the amounts received for 2015 and 2016 in the year the amounts were received. The 2014 payments are not considered support payments because they were not paid in the year of the written agreement or in the previous year, so they cannot be deducted by the payer and are not included in the recipient’s income.
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- Date modified:
- 2017-01-03