Shared Custody / Parenting and Income Tax: A Record of My Submissions to Government
August 2026
In short
Since 2017 I have made submissions to the federal government about two rules affecting separated parents who share the care of their children. One of the two was corrected in 2019. The other — the amount for an eligible dependant — was not, and it is still the subject of the work described here. This page is the record of those submissions and the replies I received.
The documents below are linked so that anyone who wants to read them in full can do so.
What I Asked For
Two things, and they are simpler than the legislation makes them sound.
First, that “shared custody” should mean the same thing everywhere in federal law. It did not. The tax rules and the child support rules drew the line in different places, so a family could be sharing the care of a child for one purpose and not for another.
Second, that where parents share the care of a child, the credits and benefits relating to that child should be shared as well — rather than turning on which parent is named in the agreement as the one making a payment.
A note on words. The submissions below use “custody,” which was the language of the law at the time. Since March 2021 the Divorce Act and the Federal Child Support Guidelines say “parenting time” instead. FCSG s. 9, am. SOR/2020-247 The Income Tax Act still uses the older term.
The Record
January 2017 — My first submission. I sent a report to the Minister of Finance, copied to a number of members of Parliament and officials, setting out the problem with the amount for an eligible dependant in detail. The report includes earlier correspondence with officials and their replies. Click here – Shared Custody and Income Taxes in Canada – Not Fair to All.
October 1, 2018 — I was invited to make a submission to the House of Commons Standing Committee on Finance, which studies matters relating to the Department of Finance and the Canada Revenue Agency, and conducts the annual pre-budget consultations. The first part of my written presentation deals with the amount for an eligible dependant; the second deals with a separate problem concerning Canada Pension Plan survivor benefits. Click here – Standing Committee on Finance presentation, 2018. An audio version of about five minutes is also available here.
January 2, 2019 — A further letter to the Minister of Finance, again copied to members of Parliament and officials, asking that the definitions of sharing be made identical for the amount for an eligible dependant and the Canada Child Benefit, and that all credits relating to shared children be shared equally by both parents. The letter includes detailed calculations showing what the rules cost parents and children. Click here – Letter to the Minister of Finance, January 2, 2019.
March 21, 2019 — The Minister of Finance replied. The letter states that the government “continues to examine the tax system to ensure that it is fair and effective,” and that changes in this area “would need to be carefully considered in terms of the impacts on different groups and implications for the tax system as a whole.” It concludes:
“Although our Government continues to monitor the issues you have raised, we are not prepared to recommend any changes at this time.”
Click here for the full reply – Response from the Minister of Finance, March 21, 2019.
May 2, 2019 — My reply to the Minister. On the same day I forwarded a letter from the Canada Revenue Agency refusing a parent’s claim on the basis that shared custody required 45 per cent of the time — an illustration of the definitional problem, and one of the points corrected later that year. Click here – Reply to the Minister, May 2, 2019 and Canada Revenue Agency letter on the 45 per cent threshold.
June 11, 2019 — An opinion piece, Accountability, fairness and justice during separation and divorce, published in The Guardian and the Journal Pioneer in Prince Edward Island.
Later in 2019 — Parliament amended the definition of “shared-custody parent” in the Income Tax Act. ITA 122.6 The Canada Child Benefit is now divided between parents who share the care of a child, using the same 40 per cent threshold as the Federal Child Support Guidelines, and the Canada Revenue Agency’s 45 per cent position fell away with it. The amount for an eligible dependant was not changed. I make no claim to have brought that amendment about. It followed decisions of the Federal Court of Appeal, and the government acted on them quickly. What matters for present purposes is simply that one of the two problems was fixed and the other was not.
Where Things Stand
The remaining problem is narrow, and it is worth stating plainly. Where parents share the care of a child and the support obligation is written as two payments — each parent paying the other the amount set by the tables — either of them may claim the amount for an eligible dependant. Where the identical arrangement is written as a single net payment of the difference, the parent making that payment is denied the credit permanently. ITA 118(5), 118(5.1) The incomes are the same, the parenting time is the same, and the money changing hands is the same. Only the wording differs.
The Tax Court and the Federal Court of Appeal have held repeatedly that this result follows from the words of the Act, and that only Parliament can change it.
There is a reason to think the change is achievable. In amending the Canada Child Benefit in 2019, Parliament accepted that where parents share the care of a child on the 40 per cent test, a federal benefit relating to that child should follow the sharing rather than the paperwork. The same reasoning applies to the amount for an eligible dependant, in the same Act, for the same families. I continue to work on it, now with colleagues from the Academy of Financial Divorce Specialists.
If you are separating, or already have an agreement, refer to my article titled, Shared Custody and the Amount for an Eligible Dependant Tax Credit, which explains how the wording of an agreement affects the credit, and what can and cannot be done about it afterwards.
Blair Corkum, CPA, CA, R.F.P., CFP, CFDS, CLU, CHS holds his Chartered Professional Accountant, Chartered Accountant, Registered Financial Planner, Chartered Financial Divorce Specialist as well as several other financial planning related designations. Blair offers hourly based fee-only personal financial planning, holds no investment or insurance licenses, and receives no commissions or referral fees. This publication should not be construed as legal or investment advice. It is neither a definitive analysis of the law nor a substitute for professional advice which you should obtain before acting on information in this article. Information may change as a result of legislation or regulations issued after this article was written.©Blair Corkum