5 tax tips for parents
Tax and Estate Planning Advocate Doug Carroll explains some of the tax breaks available to parents.
If you’re a Canadian with children, here are five tax benefits that you could be benefiting from.
1. Canada child benefit
This is a tax-free monthly benefit for families designed to help with the cost of raising children. Payments are based on a variety of factors, including the number of children in your care, their age, your marital status and your adjusted family net income (AFNI). Learn more on the Government of Canada website about eligibility and how much your Canada child benefit could be.
2. Child disability benefit
This is a tax-free monthly benefit for families who care for a child under age 18 with a severe and prolonged physical or mental impairment. The maximum monthly benefit for the July 2022 to June 2023 period is $248.75, but is reduced if your 2021 AFNI is over $71,060.
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3. GST/HST credit
The goods and services tax/harmonized sales tax refundable credit is a tax-free quarterly-paid amount intended to offset GST/HST. From July 2022 to June 2023, the base individual credit was $306 per year, subject to a clawback based on your 2020 income beginning at over $39,826. The credit increases if you are married/common-law or have children under age 19.
In October 2022, the Canadian Government also issued an additional $2.5 billion through one-time GST credit payments in an effort to assist individuals and families that have been most affected by rising inflation.
4. Child care expenses
You may deduct child care expenses you incurred that allowed you to earn income, carry on a business, go to school or conduct research. Generally, these expenses must be claimed by the lower-income spouse. Tuition/education, leisure and recreation costs do not qualify.
5. Adoption expenses
You can claim a credit for many of the costs related to adopting a child, including adoption agency fees, court/administrative costs and travel. The eligible time period can range from the ministry application date through to when the child begins living with you.
Read more about child-related programs at the Government of Canada website.
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The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. The material is for informational and educational purposes and is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.