New tax measures for families have been announced effective for the 2014 and 2015 taxation years. More details can be found on the government website, but we have summarized these measures below for ease of reference.
Call our office if you have any questions about these measures. We would be happy to arrange a meeting to discuss how these measure would apply to your tax situation and to assist with the preparation and filing of your tax returns to ensure you are receiving all of the credits to which you may be entitled.
New Family Tax Cut
A non-refundable tax credit worth up to $2,000 that effectively allows income splitting on up to $50,000 of income for two-parent families with children under 18. This credit will be available starting with the 2014 taxation year.
Enhanced Universal Child Care Benefit and Elimination of Child Tax Credit
The Universal Child Care Benefit (UCCB) will be increased from $100 to $160 per month for children under the age of six. A new benefit of $60 per month will be created for children aged six through 17. This credit is effective beginning in January 2015, but the first payments will not be made until July 2015 and will include a lump sum retroactive payment through January 2015.
The child tax credit, a non-refundable federal tax credit received by either parent on their tax return, will be eliminated starting in 2015. This should not be confused with the Canada Child Tax Benefit (CCTB), a monthly benefit based on family income, which is not being affected and will remain in place.
Increase in Child Care Expense Deduction
The maximum claim under the child care expense deduction will be increased by $1,000 starting with the 2015 taxation year. Depending on the age of the child, and whether the child is eligible or the disability tax credit, the maximum deduction per child will now be $8,000, $5,000 or $11,000 instead of $7,000, $4,000 or $10,000.
Doubling the Child Fitness Tax Credit
The child fitness tax credit has been doubled to $1,000 per child starting in 2014. This credit is now refundable so that even families that would not pay tax can benefit from this credit as it will generate a tax refund if no tax is payable.
No changes have been made to the child arts credit which remains at $500 and is non-refundable.