Tax Tidbits!
by David J. Rotfleisch, C.A., LL.B.

Tax Tidbits!
If separated or divorced parents have joint custody of a child, only one of them may claim the equivalent to married credit under the Canadian Income Tax Act. If they cannot agree on who will claim the exemption, neither may claim it.
Canadian residents are required to report worldwide income from all sources for Canadian Income Tax purposes. If you fail to do this, or if you choose an offshore structure that violates the intention or spirit of the Canadian Income Tax Act, you could face a battle with the Canada Customs and Revenue Agency, and if you lose you will be subject to interest and penalties.
You are generally entitled to receive a tax credit on your Canadian Income tax return for the amount of foreign withholding tax paid on amounts received from other countries. In effect CCRA recognizes the foreign tax that you have paid as a reduction of your Canadian income tax liability.
The "kiddie tax" applies to certain income received by a trust from a related business where minors are beneficiaries of the trust. If a family trust is established for the benefit of a spouse or children who have reached age 18 in the year, the kiddie tax won't apply on income taxed in the hands of these beneficiaries.
Disability insurance receipts will be free of Canadian income tax only if an employee has paid the insurance premiums personally, or if the premiums for all employees were paid by the employer, and included as a taxable benefit of each employee. If the employer pays the premiums and they are not treated as a taxable benefit for all employees, then any disability insurance benefits will be taxable to the individual recipient.
Most individuals have received, or will soon be receiving, their 2001 Canadian Income Tax assessments. If you disagree with the tax department you need to file a Notice of Objection to protect your rights
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