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.
Principal Issues: 1. Application of the restrictions under p. 118(5)(b)
Position: 1. The restrictions must be interpreted in the context of the requirement to pay support in respect of a particular person
Reasons: 1. The wording of the legislation
Marc Grignon
Senior Programs Officer
Assessment and Benefits Services Branch 2011-042643
Individual Returns Directorate Robert Dubis
Strategic Planning & Corporate Integration Division (905) 721-5191
Legislation Section
25 McArthur Ave.
Place Vanier, Tower C
Ottawa ON K1A0L5
February 1, 2012
Dear Mr. Grignon:
Re: Amount for Eligible Dependent
This is in response to your e-mail dated November 1, 2011 in which you asked for our views on the application of subsection 118(5) of the Income Tax Act (Act) in the year of marriage breakdown.
In the case outlined, Parent A and Parent B separate during the year and live separate and apart thereafter. Parent A retains custody of their only child subsequent to separation and Parent A is required to pay spousal support to Parent B after separation pursuant to a written agreement. In the case where Parent A claims a deduction under subsection 60(b) of the Act for spousal support payments, you ask if subsection 118(5) of the Act precludes Parent A from claiming a deduction under paragraph 118(1)(b) of the Act in respect of the child for the year of marriage breakdown?
The preamble in subsection 118(5) of the Act establishes that the restriction to claiming a deduction in respect of a person only applies where there is a requirement to pay a support amount to the individual's spouse or common-law partner or former spouse or common-law partner in respect of that person.
In the example provided, Parent A is not required to pay a support amount to Parent B in respect of the child. Therefore, assuming the child otherwise meets all the conditions required for a deduction under paragraph 118(1)(b) of the Act at any point in the year, Parent A could claim the child as an eligible dependent in addition to the deduction for the support payments to the spouse under subsection 60(b) of the Act.
Yours truly,
Sharmini Ratnasingham
Manager
for Director
Financial Industries Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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