The Child Tax Benefit After Separation

February 26, 2008

By Brad Smith

There are often changes that arise as a result of separation that may impact the amount of the Child Tax Benefit received. This includes that a child has started to live with you, a change in the family income or shared custody.

If your spouse previously received the child tax benefit, you may be eligible for the Child Tax Benefit if, after separation, you now have care and control of the child. You should apply for the Child Tax Benefit.

The Child Tax Benefit is based upon the family net income. For example, the family net income of a two income household will be reduced after separation. This will result in an increase of the Child Tax Benefit or receipt of the Child Tax Benefit when none was received previously. The Canada Revenue Agency provides an on-line calculator to estimate your Child Tax Benefit.

You should apply to adjust the Child Tax Benefit as a result of separation. The Canada Revenue Agency will process your application for a change after you have been separated for 90 days. The Child Tax Benefit will be paid retroactive to the date of separation. If you wish to apply to change the Child Tax Benefit because of your separation, you will require a Martial Status Change form.

You should not wait until you file your tax return to identify your change in marital status. The Canada Revenue Agency will not automatically make a retroactive adjustment of your Child Tax Benefit. In addition, the Child Tax Benefit can only be made retroactive for 11 months. Thus you should not wait until you file your income tax return as you may not receive all of the Child Tax Benefit to which you are entitled.

We recommend that you apply as soon as possible after you have been separated for 90 days.

SHARED CUSTODY OR SHARED CARE AND CONTROL

The Canada Revenue Agency allows more than one person to receive the child tax benefit if there is shared custody. Shared custody exists when a child lives with two different individuals and both are considered to be eligible individuals. Shared custody parents must live in separate locations, live with the child or children on an equal or near equal basis and be primarily responsible for the child’s or children’s care and upbringing when living with the child or children.

If eligible, each parent will receive monthly child tax benefit payments equal to 50% of the amount that would have been received if the child resided with the parent on a full-time basis. The Canada Revenue Agency will determine eligibility to share the child tax benefit when there is an application. The Canada Revenue Agency is not necessarily bound by an Agreement or court order regarding entitlement to the child tax benefit. The Canada Revenue Agency will determine entitlement based upon the circumstances (including any Agreement or court order).

Please go to the following for more information:

Child Tax Benefit

http://www.cra-arc.gc.ca/bnfts/cctb/menu-eng.html

Shared Eligibility

http://www.cra-arc.gc.ca/bnfts/cctb/fq_lgblty-eng.html

Child and Family Benefits Online Calculator
http://www.cra-arc.gc.ca/bnfts/cctb/fq_pymnts-eng.html