Shared custody or shared parenting and the CRA

February 1st, 2013 by

There has been a tectonic shift in the way people are choosing to parent their children after separation in regards to shared custody or shared parenting. Many people, being mindful of the reality of their situation, are choosing to share the responsibility of parenting their children. This means different things for different families – some parents may choose to have their children rotate between their residences, whereas some families choose to have one child living with one parent, and the other child living with the other parent. Either of these scenarios are what is being called “shared parenting”.

Shared parenting situations affect the way that parents can claim the Canada Child Tax Benefit (“CCTB”), and the rules for that sharing have changed dramatically over the years.

It used to be that the lower income earning parent could claim the full CCTB for all of the children as this was viewed as maximizing the tax benefits available between separating spouses. In fact, the entitlement to this benefit was often negotiated in Separation Agreements, and commonly formed part of a final Court Order between parties.

The CRA became aware of this trend, and, predictably, changed the rules to minimize the amount of the benefit to be paid to either person. Until July 2011, the CRA required the parents to share entitlement to the benefit, and rotate that benefit on a semi-annual basis.

In July 2011, the Income Tax Act was amended to provide that shared custody parents can both be eligible individuals in any month. Therefore, both parents now receive half of the benefit that they are entitled to every month, rather than the full benefit for six months out of the year, and nothing for the remaining six months. Any persons who were previously sharing the CCTB on a six-month rotational schedule are now receiving their benefit monthly.

Even if you have a Separation Agreement or Court Order which directs you to claim the full amount of the CCTB regardless of your shared custody scenario will not likely be recognized by the CRA.

For more information on shared custody or shared parenting, visit .

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