Did you know that having children can be a benefit to you in terms of taxes? If you have kids, you can take advantage of the Canada Child Tax Benefit.
The Canada Child Tax Benefit, or CCTB, is available to eligible families to help with the cost of raising their children. This is a non-taxable monthly payment that is based on your family net income. When you file your tax return, your monthly payment amount is figured, and then you receive the credit over time. This benefit can help you pay for the costs that come with raising children.
How Does the CCTB Work?
First of all, you need to understand how your family net income works. When you raise children, your income is taken into account, and a tax benefit is figured to help you offset the cost. The lower your income, the more help you receive.
Family net income is your net income from your last tax return plus the net income of your spouse or common-law partner. You can find this information on Line 236 of your tax return. The income of your spouse or common-law partner is added to yours to determine your household's net income.
The Canada Revenue Agency provides a Child and Family Benefits Online Calculator to give you an idea of what you can expect to receive. Any of the online tax software programs also have provisions for this deduction. Realize that the Universal Child Care Benefit and the money from a registered disability savings plan are taken into account, and excluded in order to provide you with an “adjusted” version of your net income.
Additional Benefits To The Canada Child Tax Benefit
The Canada Child Tax Benefit may also include an amount for either the National Child Benefit (NCB), for low income families, or the Child Disability Benefit (CDB), to help care for disabled children. This means that if your family is considered low-income, or if your child is disabled, you can get an extra benefit to help you offset the additional burden associated with caring for your child.
Make sure you understand these programs, and how you can get a tax break with their help. Check with a knowledgeable professional or with the CRA to determine whether or not you can participate in this plan.
To be eligible to receive the Canada Child Tax Benefit, you must be a Canadian resident that is the primary caregiver for a child under the age of 18. Either you, or your spouse or common-law partner, must be a Canadian citizen, a permanent resident, temporary resident living in Canada for the past 1 1/2 years, or a protected person. Once your child is born, you can apply for the CCTB by mail or online.
You should apply for the Canada Child Tax Benefit as soon as possible after your child is born. Realize, too, that you have to continue filing a tax return each year if you want this benefit. Even if you don't have any income to report, you should file your tax return so that you can continue receiving the CCTB.