The income tax filing deadline is a little over a month away (April 30) so now is the time to get those slips and receipts together and figure out just what tax breaks you get for actually having kids!
We asked the folks at H&R Block to walk us through it.
• Families get a $2,000 Child Tax Credit for each child under the age of 18 (a saving of $300 per child). And if one parent cannot use the entire amount to lower their tax payable, the unused amount can be transferred to a spouse or common-law partner. If your child is disabled, you may claim the unused portion of his or her disability amount of $7,000.
• Parents can claim the Children’s Fitness Amount (save those Parks & Rec and hockey league receipts!). The non-refundable credit is worth up to $500 for children under the age of 16 enrolled in an eligible program of physical activity. The program must last at least eight weeks at a minimum of one session per week. For children under the age of 10, the session needs to last at least 30 minutes. For children 10-16, the activity must last an hour.
• If you send your child to day care or hire a babysitter in order to go to work or school, you will probably be able claim child care expenses.If you are married or living in a common-law relationship, the spouse with the lower net income must make the claim (there are exceptions). The maximum claim for a child under the age of 7 is $7,000. This is reduced to $4,000 for children between the ages of 7 and 16. The maximum amount you may claim for a disabled child is $10,000, regardless of age.
• The Universal Child Care Benefit (UCCB) is available to any child under the age of six regardless of the family’s income. Each child under six is eligible for the $100 per month benefit. UCCB is taxable in the hands of the lower-income spouse.
• Taxpayers who use public transit can claim a non-refundable tax credit for their passes as well as passes purchased for dependent children under the age of 19. (They have to be for a period of at least one month or weekly passes purchased over a period of four consecutive weeks) Electronic payment cards also qualify.
Having a baby? You should think about the following:
• Apply for a social insurance number upon a birth of the child. You need this to open an RESP. It will also be required even for minor jobs such as babysitting or paper routes. Money earned from this type of employment qualifies for the calculation of an RRSP deduction limit.
• Upon the birth of a child, parents should complete Form RC66, Canada Child Tax Benefit Application and send it to the Canadian Revenue Agency. This form will register their child for the GST/HST Credit and Universal Child Care Benefit (UCCB) as well as the Child Tax Benefit.