Are Spousal Support payments taxable?
Do they have to be declared if they are not taxable? Answer: Child support payments paid under a written agreement or court orders finalized after April 30, 1997, are no longer deductible from income of the paying parent, or included as taxable income to the recipient under the “new” tax rules, says Keith Hazell, manager of financial planning at Vancouver City Savings Credit Union. Generally, for orders or agreements entered into before May 1, 1997, child support payments are deductible by the payer and taxable to the recipient. However, if a new order or agreement post-April 30, 1997, amends the child support payable under the pre-May 1, 1997, agreement, or where both parties jointly elect by filing Form T1157 with the Canada Customs and Revenue Agency, the “new tax rules” apply. Spousal support payments are deductible to the payer…
