2011 Federal Budget – Family Law Implications

Finance Minister Jim Flaherty tabled the 2011 federal budget yesterday. While there were no changes to personal income tax rates, there were changes which may impact the calculation of income pursuant to the Child Support Guidelines ("Guidelines") and certain tax credits available to parents. Accordingly, family law specialists should consider these changes:

1. A new $500 per child Children's Arts Tax Credit similar to the Fitness Credit will be available to offset the costs of artistic, cultural and recreational activities. The tax savings from these should reduce the costs of what may qualify as Section 7 expenses;
2. A new $2,000 Family Caregiver Tax Credit is available for caregivers of dependants with a mental or physical infirmity including spouses, common law partners and minor children. This credit will apply beginning in 2012;