3- Support payments

Any child support payment paid in accordance with a written agreement or a court order rendered on or after April 30, 1997 may not be deducted from the payer’s income nor included in the income of the recipient for tax purposes. In other cases, payments are deductible by the payer and taxable for the recipient. The agreement or judgment requiring that support payments be made to a former spouse must be registered with the CRA.

“Child support payment” covers a periodic allowance that is not solely for the benefit of the spouse or former spouse of the payer or the father or mother of a child of the payer. If the written agreement or the court order does not specify that an amount is intended exclusively for the spouse, it is considered a child support payment. Similarly, when the actual amount paid for child and spousal support is lower than the amount in the agreement or court order, the payments will first be deemed to be child support.

In general, lump-sum payments are not considered support payments. In addition, payments must normally be made directly to the beneficiary who has to be able to use it as he/she wants in order to qualify as a support payment. If payment is made to a third party, the rules should be analyzed carefully.

Agreements signed or judgments rendered before May 1, 1997 continue to be subject to the former rules (payments deductible by payer and taxable for recipient) unless the spouses agree to have the current rules apply. Once such an agreement has been made, the parties may no longer apply the former rules. Furthermore, changes to an existing agreement may result in a change of applicable taxation rules or may subject the support payments to the Support-Payment Collection Program managed by Revenu Québec.

Legal Expenses

The following table summarizes the tax treatment of legal expenses incurred by the recipient or payer of support payments, whether the recipient is the spouse or a child.

In the case of de facto spouses, legal fees incurred to negotiate a civil union or cohabitation contract or a breakup agreement to establish or negotiate the right to support payments are not deductible.