The deduction for support payments

The deduction for support payments is granted under the general tax system to taxpayers who make support payments.

In general, a support payment made for the benefit of a child under an agreement reached before May 1, 1997 is included in the income of the parent who receives the payment, and can be claimed as a deduction by the parent who makes the payment. The same rule has always applied in respect of support payments made for the benefit of a former spouse.

As of 2003, this deduction will also be granted under the simplified tax system. Eligible taxpayers will thus be entitled to claim both the deduction for support payments and the tax credit respecting the flat amount - $2 780 in 2002.

This measure will reduce the tax burden of some 40 000 households by $14 million, for average tax savings of $350 per household.

Deductions for residents of remote areas

The general tax system grants deductions to residents of designated remote areas in order to offset, among other things, the higher cost of living incurred by taxpayers who choose to live away from major urban centres. These remote areas include the Magdalen Islands, the Lower North Shore and the northern regions.

These deductions are as follows:

• a maximum housing deduction of $15 per person per day for inhabitants of the northern zones, for example, Kuujjuaq, and of $7.50 per person per day for inhabitants of the intermediate zones, for example, Cap-aux-Meules;
• a travel deduction in respect of trips paid by the employer.

Beginning in 2003, taxpayers who choose the simplified tax system will also be eligible for these deductions. These measures will benefit over 14 000 households and represent tax savings of $4 million, or $316, per household.