Is Spousal Support Taxable or Deductible in Alberta?

If you pay or receive spousal support, one of the first questions is what it does to your tax return. People often assume the answer is the same for everyone. In practice it depends on the type of payment, how it is set out in your order or agreement, and your own situation.

This article explains the parts of Alberta spousal support that affect that question, so you know what to bring to an accountant. How tax applies to your payments depends on your year and facts, so it is worth confirming with an accountant or a lawyer.

This article covers the law of Alberta.

Support law and tax law are separate questions

Spousal support is set under one of two laws. For married couples seeking a divorce, the federal Divorce Act lets a court order one spouse to pay lump-sum or periodic support. For unmarried adult interdependent partners, and for married spouses who are not seeking a divorce, the Alberta Family Law Act applies.

Those laws deal with entitlement, amount and duration. Under the Divorce Act, for example, the court considers the condition, means, needs and other circumstances of each spouse. A support order is not the same thing as a tax ruling, so do not assume the order answers the tax question.

Why the type of payment matters

A court can order support as a lump sum or as periodic payments, and it can also make an interim order while the main application is waiting to be decided. An order can run for a definite or indefinite period, or until a specified event occurs, and can carry terms and conditions.

Each of these features can matter when you ask for tax advice. Describe exactly which kind of payment you have, whether lump sum, periodic or interim, when you ask for advice.

Your order or agreement is the starting document

Your accountant will want to see the exact wording of your court order or written agreement. Details such as who pays, how often, how the amount is described and whether child support is dealt with separately can all be relevant. When child support and spousal support are both claimed, the court gives priority to child support, so the two amounts should be clearly identified.

An agreement cannot be used to vary an existing spousal or partner support order. If you want to change how payments are structured after an order exists, the route is generally an application to vary, not a side arrangement. A court can vary, suspend or terminate support where there has been a change in circumstances.

Points to confirm before you file

• Whether your support is periodic, a lump sum, or both.
• Whether the payments were made under a court order, an interim order or a written agreement.
• Whether child support is included in the same payment or set out separately.
• The dates payments started and any dates the amount changed.
• Whether payments went through the Maintenance Enforcement Program, which collects and enforces spousal and partner support unless the parties agree or the court orders otherwise.

If your order has been varied, keep the original and the varying order together. Variation can be retroactive or prospective under the Divorce Act, so the dates in the order can matter.

What to do next

• Gather your order, any agreement, and a record of every payment made or received.
• Note whether the order is under the Divorce Act or the Family Law Act.
• Ask an accountant how your particular payments are treated for the tax year in question.
• Ask a lawyer to review the wording of your order or agreement before you sign or change it.
• If your circumstances have changed, ask a lawyer whether a variation application makes sense.

Getting the order wording right at the start is far easier than fixing it later, so involve both a lawyer and an accountant when you are negotiating support.

Frequently asked questions