Income Tax Transparency 

It is that time of the year again for separated and divorced parents in Ontario to exchange income tax information, to ensure all parties are paying and receiving what was agreed upon.  

Exchanging income tax information annually is crucial for parents to ensure fair and accurate financial arrangements post-separation or divorce. Sharing this data allows both parties to verify income levels, ensuring child support payments are appropriately calculated based on current financial circumstances. 

The amount of child support to be paid is calculated based on the Ontario government’s Child Support Guidelines, which encompasses two components: 

1. The table amount (a basic monthly child support amount that covers food, clothing and school supplies, etc.) 
    

2. The amount for special and extraordinary expenses (usually called Section 7, which include expenses that cover childcare, health care and school and extraordinary extra-curriculars.) 

Exchanging Income Tax Returns and Notices of Assessments is a legal obligation for both parents and it must be done annually, even if one parent is the payor and the other is the recipient.    This is because the table amount of child support is based on the payor’s income alone but the Section 7 expense are shared on a proportionate basis between both parents. 

Clear communication and transparency regarding income, expenses, and payments are essential to avoid disputes and ensure children receive the support they need.  

Moreover, courts expect parties to exchange proof of income and update child support annually.    If you are unclear about how to adjust support or are having difficulty getting income disclosure, seeking experienced legal advice and utilizing available resources can aid in navigating the complexities of child support, ultimately prioritizing the children’s best interests during a challenging time of family transition.