Are you wondering if child support is considered income?

In most cases, when determining income for child support in accordance with the Federal Child Support Guidelines, an applicant simply needs to take the income from their spouse’s most recent income tax return.

Look at the child support table for their province.

Find the correlating amount of child support for that income based on the number of children.

Where the applying parent believes that the paying parent’s income tax return does not accurately reflect their actual income, they may ask the court to make an order that the paying parent’s income is a different value based on their evidence.

The question is, how is the proper income determined if you don’t use the paying parent’s income tax returns?

Who Is Responsible For The Income Tax Returns?

The applying parent should be aware that it is their responsibility to prove that the paying parent’s income is different than what is reported on their income tax returns.

This can be shown through paystubs, deposits into bank accounts, corporate income statements etc. Second, once it is shown that the income tax return is not a fair indicator of the paying parent’s income, the next step is to determine what income is appropriate.

The court may use a previous year’s income to estimate the current income of the paying parent if they had an unusually poor or successful year the year before.

The judge may average the last three years of income reported on the paying parent’s income tax returns if their income varies widely per year.

The court may include in the parent’s income all or part of the pre-tax income of a corporation in which the parent is a shareholder, director or officer and adjust pre-tax corporate income to add back salaries, wages, or management fees to non-arm’s length parties.

Determining Income And Child Support

Determining income for child support can be difficult. The court may attribute an income to a paying parent if the income on their income tax returns does not appear to show an accurate picture of their yearly income.

The court may impute an income to a party in the following circumstances:

1. Intentional under-employment;
2. Exemption from payment of income tax;
3. The parent’s failure to make proper financial disclosure;
4. A situation in which a significant portion of income is paid from dividends or capital gains; or
5. The parent’s unreasonable deduction of expenses from income.

What method the court uses in determining income for child support will depend on the circumstances. If you have questions about calculating income for the purposes of setting child support.

The Importance of Documenting Child Support Payments

You have promptly attended to paying your child support payment on time and in accordance with the Federal Child Support Guidelines.  You likely assume that your responsibility ends there.

However, there is one extra step that all parents paying child support should take. This occurs after making their child support payments and that is ensuring that they have documented the payment.

Documenting your child support payment can take many forms. It depends on how you provide child support to the other parent.  When it comes to base child support, you can track your payments in a few different ways.

First, if you pay through the Family Responsibility Office. A record will be created through their program.  Second, if you pay your spouse directly you can choose to make a payment with a paper trail.

Two common ways are through cheques and e-mail money transfers.

Child Support Considered Income Questions

If you write cheques each month, ensure that you put “[Month] Child Support” in the memo line. Include the month for which the payment will apply.

If you do e-mail money transfers, make sure that you put “[Month] Child Support Payment” in the description box.

Print off a copy of the transaction and confirmation emails from the bank that the payment was received. If you pay your spouse directly with cash make sure to have your spouse sign a receipt stating the date.

You will also need to make sure the amount of child support that was received is documented. Finally, the month that the child support payment will cover should be included.

Then make sure that they sign the receipt to acknowledge they received payment.

Examination of the Child’s Circumstances

If the child is over the age of 18 in Ontario and continues to be enrolled in school the obligation to continue to pay child support generally continues until the first post-secondary education degree is completed.

And sometimes, child support can even be payable through additional degrees.

To determine whether a child should be supported through a second degree the court will examine any relevant factors.

These include such things as the financial standing of the parents, the child’s academic performance, the child’s career goals, and the family’s expectations for education (usually the expectations prior to separation).

Whether child support will be payable requires an examination of the child’s circumstances and their ability to support themselves independently.

Have questions about whether child support is still payable for a child over the age of majority? Speak to a family law lawyer.

If you are wondering if child support is considered income in Canada, talk to a lawyer.