Shared Parenting and the Canadian Child Tax Benefit

Who gets the Child Tax Benefit when parents separate but equally share parenting?

It used to be the case that when parents separated the parent with whom the children lived most of the time received the Child Tax Benefit (often called the “baby bonus”) from the Government of Canada.

There has been a growing trend towards parents sharing parenting responsibility of children on the breakdown of a marriage or common law relationship and more and more frequently children spend half of their time in the care of each of their parents.

The Canadian Government has been adjusting its rules on who gets the Child Tax Benefit (the “CTB”) as parenting trends have been evolving. For quite some time, in shared parenting situations, the CTB would be paid to each parent for six months of the year. As of July 2011, the Income Tax Act, under which entitlement to the CTB is determined, was changed to recognize both shared custody parents as “eligible individuals”.

To be considered “eligible individuals” the parents must live in separate locations, live with the child on an equal or near equal basis and be primarily responsible for the child’s care and upbringing when living with the child.

What is considered equal or near equal is any arrangement that results in an almost equal sharing of the child’s time, for example, where a child is with each parent for alternating weeks or where the child is with a parent on an alternating four/three day sharing arrangement. In those situations each parent will receive monthly CTB payments equal to 50% of the amount the parent would have received if the child lived with that parent on a full time basis.

For more information visit the Canada Revenue Agency’s website where  you can find, among other things, an excellent Child and Family Benefits Online Calculator  that can be used to obtain an estimate of the CTB you would receive in your particular circumstances.

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