Canada: How can I change the tax treatment of my child support order or agreement?

The tax rules that apply to child support changed on May 1, 1997. Under the current tax treatment, receiving parents do not include child support payments as income and paying parents do not claim child support payments as a deduction.

These changes do not automatically apply to child support orders and agreements made before May 1, 1997. But, if both parents agree to apply the current tax treatment to their existing child support amount, they may file Form T1157 "Election for Child Support Payment" with the Canada Revenue Agency (CRA). This form states that, by joint agreement, both parents want the new tax treatment to apply to their existing child support amount.

If parents send this form to the CRA, they can avoid the court process, since the face value of the order does not change. Once parents sign the form and submit it to the CRA, the current tax treatment applies and they cannot return to the previous tax treatment.

file Form T1157 "Election for Child Support Payment" with the Canada Revenue Agency (CRA). This form states that, by joint agreement, both parents want the new tax treatment to apply to their existing child support amount.