Raising a family is not for the financially faint of heart. There are extra mouths to feed, little minds to educate and bored teenagers to entertain. The financial commitments add up and cam get expensive very quickly. Here’s a list of eight tax breaks that can provide your family with some much-needed tax relief.
Family Tax Cut credit
The Family Tax Cut credit acts as a form of income splitting. The credit allows a higher earning spouse to transfer up to $50,000 of taxable income to a lower earning spouse. Eligible families can claim relief of up to $2,000. The credit was cancelled in the 2016 federal budget so this is the last time you can claim the credit.
Child care expenses
Families can claim third-party child care expenses. The parent with the lower income can claim up to $8,000 for children six or younger, $5,000 for children aged seven to 16, or $11,000 for a child with a disability. Eligible childcare expenses include daycare, boarding school, camps and nanny services.
Children’s fitness tax credit
The children’s fitness tax credit allows families with children under the age 16 to claim eligible fitness related expenses up to $1,000 per child. A 15% credit applies for every dollar spent on programs that last a minimum of eight consecutive weeks or five consecutive days. The maximum refund is $150 per child.
Children’s arts tax credit
The children’s arts tax credit complements the fitness tax credit. It allows families to claim up to $500 per child, under the age of 16, for artistic and cultural activities. Programs related to literary, visual and performing arts—such as music lessons—must not be part of a school’s curriculum to qualify. A 15% non-refundable credit applies for a maximum credit of $75.
Universal child care benefit
The universal child care benefit (UCCB) is a taxable benefit providing $160 per child per month to families with children aged five and under. Those with children aged six to 17 receive $60 per child. The Canada Revenue Agency (CRA) issues a UCCB statement for tax purposes and the benefit is at your marginal tax rate.
This is the last year of the UCCB. The government will replace the UCCB and the Canada Child Tax Benefit with the tax-free Canada Child Benefit (CCB) in July.
Public transit tax credit
Families with members that buy monthly public transit passes are eligible for the public transit tax credit. Multiple short-term passes are also eligible for credit; these passes must entitle its holder to unlimited travel for five consecutive days and add up to a minimum of 20 days in any 28-day period.
If you use electronic payment cards, such as the Presto card in Ottawa or the Greater Toronto Area, 32 one-way trips per month are required to be eligible to claim the credit.
Family caregiver tax credit
The family caregiver tax credit was created to help those who take care of family members. Canadians who take care of dependents with physical or mental impairments may be eligible to claim $2,093. The CRA may request a signed statement from a medical practitioner detailing the nature and duration of the impairment.
Adoption expenses tax credit
Parents can claim legal costs, fees paid to licensed agencies, and other eligible expenses related to the adoption of a child under the age of 18, up to a maximum of $15,255 per child. The adoption expenses tax credit provides a savings of 15%, up to a maximum $2,288.
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