A 2018 court order required retroactive child and spousal support payments to be made by an individual to a former spouse on a monthly basis for the period from 2013 until the date of the order but treated various payments previously made by the individual to the former spouse as being in satisfaction of this periodic obligation and also contemplated that such obligation would be satisfied in part by way of set-off against an obligation of the former spouse to pay an equalization amount to the individual respecting a division of matrimonial property.
Regarding whether the retroactive periodic support amounts would be deductible, CRA indicated that although the order, pursuant to the court’s legislative authority to do so, made the amounts payable retroactively on a periodic basis during the stipulated period (2013 to 2018), "payments made before the date of a court order or written agreement cannot be considered to be paid under the order or agreement.”
Regarding the deductibility of amounts paid after the time of the order, the Directorate stated:
[W]here the lump-sum amount is paid pursuant to a court order that establishes a clear obligation to pay retroactive periodic maintenance for a specified period prior to the date of the court order … the lump-sum payment will not, in and of itself, change the nature of the underlying legal obligation of periodic maintenance payments and, if all other requirements are met, the lump-sum amount paid will be deductible to the payer according to the formula in paragraph 60(b) … .