Is Spousal Support Taxable in Ontario for the Payer and Recipient?

Generally, yes: spousal support paid under a court order or written agreement made after April 1997 is taxable to the recipient and deductible by the payer, but only if two conditions are met. The order or agreement must clearly state the spousal amount, and all child support for the current and previous years must be fully paid.

The support must be paid periodically, with timing set out in a court order or written agreement, and the payer must be living separate and apart from the recipient when paying. Support paid without a court order or written agreement is not subject to these tax rules. Support paid in the year the order or agreement is made, or the year before, is deductible and taxable only if the order or agreement states those payments were considered received under it.

Lump sums are treated differently. A single lump sum generally does not count as periodic support, and a lump sum paid to be released from future support is neither deductible nor taxable. A lump sum paying arrears of periodic amounts that came due after the order may still qualify. An accountant or lawyer can confirm how it applies to you.