Only Spousal Support is tax deductible, however both the spousal and child support amounts must be reported on the tax returns of the payor and the recipient. And CRA has lots of rules in regards to Support Payments and claiming deductions on the tax return.
- If the person paying the child support is required to pay that support for a particular dependant, they can not make a claim for the Eligible Dependant Amount for the same child.
- If a person pays both Child Support and Spousal Support, they must first use the Non Taxable/Deductible Child Support before making a claim for Deductible Spousal Support. The following information from CRA explains how that works.
If your court order or written agreement specifies child support payments and support payments for the recipient, priority is given to the child support. This means that all payments made are first considered to have been made toward child support. Any amount paid over and above the child support amount is considered to be support payments for the recipient.
All child support payable to a recipient must be fully paid before any amounts paid as support for the recipient can be claimed as a deduction. Any overdue child support amounts are carried forward and added to the next year's support payments.
So if your client paid $5,000 for Child Support, and $3,000 for Spousal Support, he must report the entire amount, and specify the $5,000 as being "non-deductible". The amounts will be shown on the T1 General as shown in the screenshots.
