Child support is calculated on the basis of the paying party’s gross income – the income that person earns before they are taxed on it. While this might seem pretty straightforward, it is not always that easy to determine what a person’s true income is.
It is quite common for parties who are paying and receiving child support to simply default to looking at the “Total Income” of the paying party for the purposes of calculating child support – this is the number that is listed at Line 150 of a person’s T1 Income Tax Return. From there, parties often use this number and any one of the numerous online Child Support Calculators to calculate what they be paid or be paying.
However, there are a number of circumstances that can make a person’s Line 150 Total Income not entirely representative of the actual total income that they have earned. These are not always easy to recognize, and may not be so clear to appreciate. For instance, there are a number of circumstances that can lead to calculating Child Support on an amount less than that listed on Line 150 of the paying party’s tax return. For example a party can typically deduct from their Line 150 Income:
Similarly, there are a number of circumstances that might warrant calculating child support on an amount that is greater than that shown in the paying party’s Line 150, such as:
In addition to the above categories, there are other circumstances where a paying party’s income might not be accurately reflected by the income they report in their tax returns. For instance when a paying party is a shareholder, director, or officer of a corporation, that party has a greater ability to determine what income they will report for tax purposes, and to leave money within their corporation rather than pay it to themselves. In such a case, an argument may be made that the money left in the corporation in that particular year should be added, in whole, or in part, to the income of the paying party for the purposes of calculating child support.
This is only one of a number of other circumstances that can affect a paying party’s income, but the above should demonstrate that it is not always so clear-cut when it comes to determining income for the purposes of child support.
Lynsey Mincher and Andrew Koeman, and their Associate Lawyers have a wealth of experience in dealing with complex income issues in the areas of child support and spousal support. Should you require assistance in determining your income, or the income of another party for the purposes of support, the lawyers at Mincher Koeman LLP have the skills and the experience to help you, please contact Mincher Koeman LLP at 403 910 3000 or firstname.lastname@example.org.
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