Is Spousal Support Taxable or Tax Deductible in British Columbia?
This answer covers the law of British Columbia.
Often yes: spousal support paid under a court order or written agreement is generally deductible for the person paying it and taxable to the person receiving it, if it meets the tax definition of a support amount.
A support amount is a periodic allowance for the recipient's maintenance, which the recipient can use as they choose, payable under a court order or written agreement while the spouses live separate and apart because of relationship breakdown. The payer reports total support on line 21999 and claims only the deductible part on line 22000, and the recipient reports it on lines 12799 and 12800. The order or agreement must be registered with the CRA, and amounts beyond what it requires do not qualify.
Without a court order or written agreement, the payer cannot deduct the payments and the recipient does not report them. Lump sums are less straightforward because the definition refers to a periodic allowance, so ask an accountant how yours would be treated. A payer who makes a retroactive lump sum of $3,000 or more and can deduct it must give the recipient Form T1198 when it is reportable income to the recipient.
Key takeaways
- Child support under post-April 1997 orders is not deductible by the payer and not taxable to the recipient.
- Without a court order or written agreement, the payer cannot deduct the payments and the recipient does not report them.
- The payer reports total support on line 21999 and claims only the deductible part on line 22000, and the order or agreement must be registered with the CRA.
- Legal and accounting fees for separation, divorce, or setting or contesting support are not deductible on lines 22000, 22100 or 23200.