Life is busy enough but with children it can sometimes get beyond busy. Between work and school, we are continuously on the go with after school activities, sports and practices and so much more. And time isn’t the only factor with these extra-curricular activities – they can get costly too. Thankfully, there are new tax credits for Canadian families that may help put a few dollars back into your wallet. Caroline Battista, senior tax analyst with H&R Block Canada, provides insight into these new credits and who can benefit from them:
Designed as a limited form of income splitting, the new Family Tax Cut allows qualifying families to save when one spouse earns considerably more than the other. Families with children under the age of 18 will be able to claim a non-refundable tax credit equal to the amount of tax savings that would be realized by transferring up to $50,000 worth of income from the higher-earning to the lower-earning spouse or common-law partner.
“This will generally be beneficial if one spouse is in a higher tax bracket than the other or if the lower-income spouse has non-refundable tax credits that are not being fully utilized,” explains Battista. The tax credit will be capped at a maximum of $2,000.
Similar to the rules for claiming the child amount, a family must have a child under the age of 18 at the end of the year who must normally reside with them throughout the year. An exception to this rule would be if the parents of a child remarry or enter into new common-law partnerships during the year, or if a child is born, adopted or passes away during the year.
And more good news for Canadian families. Though the UCCB does not show up in your tax refund, parents with children under 18 will start to see an increased benefit in July 2015. For children under six, the monthly amount will be $160 (up from $100) and for children between six and 18, it will be $60 a month. The increase for January to June will be paid in a lump sum in July 2015. And then parents can expect the increased amounts to arrive monthly after that. If you haven’t already registered for child benefits, use Form RC66.
These, and other possible credits, can make a difference on your 2014 tax return; even a few dollars can have an impact. Battista advises Canadians to do their homework before they file in order to claim all their credits and deductions. If you don’t feel comfortable doing your own taxes, visit a local H&R Block office where a professional can assist you in every step, do a thorough review of your information and ensure you don’t miss a thing.
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