Since 2011, Canada Revenue Agency has recognized the special circumstances of parents who share parenting time of a child by allowing parents to share benefits. The CRA determines who qualifies, based on an interpretation of shared parenting as meaning a child generally lives with a parent between 40% and 60% of the time.
However, recent Federal Court of Appeal decisions go against the CRA’s practice. Based on the Court’s more narrow interpretation of shared parenting – which it interprets as a child residing with the parent between 45% and 55% of the time – some parents who share parenting time may be prevented from sharing the benefits they are entitled to.
Because of this, the Government, through the Department of Finance, has announced its intention to propose an amendment to the Income Tax Act to clarify the eligibility for the Canada Child Benefit. This amendment will ensure that benefits paid to families in shared-parenting arrangements are not stopped or interrupted.
More details will be announced soon.