11 February 1997 Internal T.I. 9637287 - ALIMONY AND MAINTENANCE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

		February 11, 1997

	Winnipeg Tax Services Office	HEADQUARTERS
	Debi Ellement	M. Eisner
	Client Assistance Directorate	(613) 957-8953
		963728

Maintenance of Children

This is in reply to your memorandum of November 6, 1996 concerning the deductibility of amounts under paragraphs 60(b) and (c) of the Income Tax Act (the Act) by virtue of subsections 60.1(1) and (2) of the Act. Your particular concern is whether payments, which otherwise satisfy the necessary requirements for deductibility, can be disallowed when they are made in respect of children 18 or over.

Our Comments

Paragraphs 60(b) and (c) of the Act set out the conditions under which amounts paid for the maintenance of children are deductible by the payer. Generally, it is our view that as long as the payments are made for the maintenance of children and are otherwise deductible under paragraph 60(b) or (c) of the Act, they cannot be disallowed on the basis that the child has reached the age of 18. In this regard, the Act does not specify any age. We have enclosed a copy of correspondence (file 961177) which illustrates these comments. However, because the child has reached the age of majority, we suggest that each actual fact situation involving child maintenance be considered closely to ensure that the requirements of paragraph 60(b) or (c) of the Act are in fact met.

The provisions of subsection 60.1(1) of the Act may have application where the payments are made to a third party (including the child) in respect of the child. This provisions covers payments made for the benefit of a child in the custody of an individual, such as a former spouse, that are made pursuant to a decree, order, judgement or written agreement described in paragraph 60(b) or (c) of the Act. While it is a question of fact whether a child is in the custody of such an individual, it is generally considered that custody in respect of a child ceases when the child reaches the age of majority (i.e., the age of 18). Consequently, once the child reaches the age of 18 and the payments are made directly to a third party in respect of the child, it is our general position that those payments are no longer deductible by virtue of subsection 60.1(1) of the Act. Similar considerations can be given to any claims by virtue of subsection 60.1(2) of the Act. As well, the amounts will not be required to be included in income under paragraph 56(1)(b) or (c) of the Act. We have included a copy of correspondence (file 931533) which is illustrative of these comments.

Further useful comments on subsections 60.1(1) and (2) of the Act are set out in paragraphs 15 to 19 of IT-118R3 "Alimony and Maintenance".

Should you require any technical assistance on a particular case, we would be pleased to provide our views.

John F. Oulton
Section Chief
Business, Property and Personal Section
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch