93.5 Changes to the Income Tax Act
A. Regarding the tax obligations of child support income:
[Whereas,] Rationale:
The objective of Revenue Canada should be to tax all Canadians equitably and progressively. The majority of those receiving child support are low-income women who must include child support payments as taxable income.
The high cost of supporting children makes it extremely difficult for them to cover current costs and at the same time put funds away to meet future tax obligations. On the other hand, the payer may deduct the child support payments from income and not pay income tax on the money used for support payments. Prepayment of the tax is recommended because, in general, taxpayers who have monies deducted at source find it easier to meet income tax obligations.
[RESOLVED,] The National Council of Women of Canada urges the Government of Canada to require that:
- In order to qualify for the deduction of child support payments from annual income, the tax payments must be pre-paid by the payer, and the payer must have paid all child support payments in full and on time.
- Where child support is not paid in full and on time, the payer (debtor) must forego the deduction for the calendar year.
- When child support monies have to be recovered through legal actions, no tax shall be paid by the recipient, because tax has already been paid by the payer.
B. Regarding the tax obligations of interest income for low and middle-income retired Canadians
[Whereas,] Rationale:
The present low interest rates have drastically cut the incomes of many low and middle-income retired Canadians who depend on interest-bearing investments to supplement pension income. In fact, many have little or no private pension income, and the majority of this group are women.
[RESOLVED,] The National Council of Women urges the Government of Canada to institute a tax credit for low and middle-income retired Canadians on the first $1000 of interest income from Canadian sources.