Is Spousal Support Taxable Income in Ontario for the Payor and Recipient?

Whether spousal support is taxable depends on how it is paid and what your order or agreement says. Support paid under a court order or agreement made after April 1997 is taxable to the recipient and deductible by the payer if two conditions are met: the order or agreement clearly states the spousal amount, and all child support for the current and previous years is fully paid.

The payments must be periodic, 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 the support-payment tax rules. Support paid in the year the order or agreement is made, or the year before, counts only if the order or agreement says those payments were considered received under it. A single lump sum generally does not count as periodic support, and a lump sum paid to be released from future support is not deductible or taxable.

Tax treatment can turn on the exact wording of your documents, so confirm it with an accountant or lawyer before you file.