Not sure about the latest changes to child tax benefits in Canada? Find out what’s new, so you can get the tax breaks you’re eligible for.
Between child care, food, clothing and school, raising children costs a lot of money. Each year at tax time, it pays to know about the tax relief the government offers to parents like you, to help make ends meet.
New for your 2016 tax return
Canada child benefit (CCB). This was introduced in 2016, with the first payments going out to eligible families in July 2016. It’s a tax-free, monthly payment that replaces the Canada Child Tax Benefit, the national child benefit supplement and the universal child care benefit. You don’t have to declare CCB payments on your income tax return, but you need to file a return (even if you didn’t earn any income) every year so the government can do an annual calculation of whether you’re eligible for the benefit. Your spouse or common-law partner (if you have one) must also file every year. The government calculates your payment based on 4 factors:
- The number of children living with you
- Their ages
- Your adjusted family net income
- Whether your child is eligible for the child disability benefit
To arrive at the monthly payment, the Canada Revenue Agency (CRA) starts with $533.33/month for each child up to age 6 and $450/month for each child age 6-17, for families with an adjusted family net income up to $30,000. Then it reduces that payment on a sliding scale, based on your income and number of children. To find out how approximately much you may be eligible for, use the CRA’s child and family benefits calculator. If you haven’t yet applied for the CCB and you think you are eligible, or if you’ve just had a baby, be sure to apply.
Unchanged from last year
Child care expenses. You can claim up to $8,000 for child care expenses for each child under age 7, and up to $5,000 for each child over 7 but under 16. If your child lives with a disability, you may claim up to $11,000.
Making their final appearance on your 2016 tax return
Children’s arts amount and fitness tax credit. The maximum you can claim per child for the children’s arts amount has been reduced to $250, and the maximum per child for the children’s fitness credit has been reduced to $500. Both have been eliminated as of the 2017 tax year.
And an FYI for parents of older children:
Education and textbook tax credits. The tuition tax credit is unchanged, but the 2016 tax return is also the last time the education and textbook tax credits can be claimed. Your children must claim education, textbook and tuition credits on their own tax returns first, but they may be able to transfer some of their credits to you, if they earned very little (which will help you if you paid any of their education costs), or carry them forward.
You may also be eligible for additional credits if you are a single parent, your child lives with a disability, you stopped working or earned less while caring for your kids, or you save for your child’s education in a registered education savings plan (RESP). For advice about how these credits might help your family, consult a tax professional.