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Alimony and Maintenance

  • The terms "alimony" and "maintenance" have been replaced by the term "support amount" in the Income Tax Act, effective January 1, 1997. Prior to 1997, all payments for marriage breakdown or support of a child were deductible on the payer's income tax return. Since 1997, these payments are only deductible if they are not child support payments.
  • Only payments made as a result of a legal judgment or separation agreement are deductible.
  • To obtain a tax deduction for support payments, an individual must not be living with the recipient of the funds.
  • Any deductible payment must be included in the income of the recipient.
  • Payments made to a non-resident of Canada may still be deductible.
  • Since payments are often a combination of child support and spousal support, we must be able to calculate the portion that pertains to spousal support since that is the only portion that is tax-deductible. This is done by first determining the child-support amounts and then deducting these from the total payments to come up with the remainder which is tax-deductible.
  • Periodic payments are deductible but a lump-sum payment is not.
  • If payment is made to a third party for the benefit of your spouse, the payment should still be deductible.
  • You can transfer funds from an unmatured RRSP to your former spouse's RRSP or RRIF without tax consequences, if the transfer is according to the terms of a legal judgment or separation agreement.
  • Canada Pension Plan benefits can be divided between a taxpayer and the former spouse, if so determined by agreement or court order. However, if pension income other than from CPP is divided between the taxpayer and former spouse, the CRA may not agree to this and revert to taxing only the recipient of the pension income.

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