Are spousal support and alimony the same?
“Spousal support” is the money that one spouse may have to pay to the other spouse for their financial support following a separation or divorce. It is sometimes called “alimony” or “maintenance.” Spousal support is usually paid on a monthly basis, but it can be paid as a lump sum.
Is retroactive spousal support tax deductible?
(c) Tax issues Retroactive spousal support is paid in the form of a lump sum. Ordinarily, lump sum spousal support is neither deductible to the payor, nor taxable in the hands of the recipient. There is now an additional method of resolving these tax issues in the case of retroactive support.
Do you claim child support on taxes Canada?
If you make child support payments for a child and the other parent does not, you cannot claim an amount for an eligible dependant for that child. Only the parent who does not pay child support can claim the amount for an eligible dependant on line 30400 of their tax return (Step 5 – Federal tax) for that child.
Is spousal support considered earned income in Canada?
Spousal support (commonly referred to as alimony) is considered fully taxable in the hands of the recipient. And it is deductible from the income of the payee.
How do you claim child support on taxes?
The new tax rules for child support are based on the recommendations of the Task Group on the Taxation of Child Support and the Family Law Committee. Under the new rules, child support payments are not deductible to the payer, and are not included in the income of the recipient.
How do you prove child support for a mortgage?
In order to prove that the child support income is legitimate, the lender may ask you to provide the following:A copy of the Family Law Court Order.Bank statements showing credits to your account.A letter from your solicitor.A letter from the Child Support Agency (CSA).
Is child support calculated in debt to income ratio?
Your lender will require documentation that describes the agreement, the FHA loan applicant’s financial commitment, etc. In general, child support payments and maintenance payments are considered by the FHA to be a “recurring liability” and that financial obligation is included in your debt-to-income ratio.
Is alimony included in debt to income ratio?
Alimony payments are also included in your debt-to-income ratio but they are treated differently. Lenders have the option to either subtract the alimony payment from your monthly gross income or include the payment as debt to calculate your debt-to-income ratio.
Can you gross up alimony income?
Alimony and separate maintenance payments you receive under such an agreement are not included in your gross income.
Can you gross up BAH and BAS?
Your base pay is taxable, but your BAH, BAS and COLA is not. If you think you might have income that is non-taxable, make sure you point that out to your loan officer and ask if they do in fact “gross up” non-taxable income to help qualify.