Payments made before the date of the court order or written agreement

An amount paid before a court order or written agreement takes place or comes into effect is recognized if the order or agreement states that any amount previously paid is considered paid and received under the order or agreement. However, the payments must be made in the year the order or agreement was made, or in the previous year.

Example – Amount paid before a written agreement

Since the couple separated in January 2021, Brendan has been paying $500 monthly to Sarah in spousal support. On January 8, 2023, a written agreement was made and states that Brendan must pay $500 monthly in support.

The agreement also states that the amounts paid before January 2023 are considered paid and received under this agreement.

The agreement is deemed to have been made on January 1, 2022 and all payments made from January 1, 2022 and January 8, 2023 inclusively are deemed to be made under the agreement.

The payments made in 2022 and 2023 are considered support payments because they were paid in the year of the written agreement and the previous year. Brendan may deduct the payments for 2022 and 2023 in the year the amounts were paid. Sarah will include the amounts received for 2022 and 2023 in the year the amounts were received. The 2021 payments are not considered support payments because they were not paid in the year of the written agreement or in the previous year. They cannot be deducted by Brendan and are not included in Sarah’s income.

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