After reviewing your tax return and making standard adjustments, if the reported income still doesn't reflect what's actually available for support purposes, the court can impute income to the spouse. This means assigning a different income amount than what appears on your tax return for Child Support calculations.

Income imputation often occurs when a parent is intentionally underemployed or unemployed. However, there are valid exceptions, including when the parent needs to care for a child's needs, has legitimate health issues, or has reasonably decided to return to school.

Courts also may impute income when a parent doesn't pay taxes or pays significantly lower taxes, is exempt from federal or provincial income tax, or lives in a country with significantly lower tax rates than Canada.

Imputation might arise if it appears that income has been diverted which would affect the level of child support to be determined under the guidelines or also if the parent is not utilizing property reasonably to generate income.

For example, they have a suite in their home and they're not renting it or something of that nature. Also, if the parent has not provided income information, an imputation of income might be reasonable to attribute some amount of income where there aren't documents to show what exactly it should be.

Imputation can also arise where the parent unreasonably deducts expenses from their income if they derive a significant portion of income from dividends, capital gains, or other sources that are taxed lower than employment or business income.

Being a beneficiary under a trust or receiving trust income or benefits can also lead to income imputation, as these arrangements often provide access to funds not fully reflected in tax returns.

So in those cases under the law, a more reasonable income can be attributed to you and child support would be paid on the imputed amount.

Income imputation isn't punishment for legitimate financial strategies. There’s nothing wrong with living in a low-tax country or receiving dividend income. The goal is ensuring child support reflects what's actually available to you rather than what shows on your tax return.

If any of these situations apply to you, add income imputation to your list of topics to discuss with your family lawyer. Getting proper legal advice helps you understand how these rules might affect your specific situation and how to best handle potential imputation issues.