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Tax breaks for having children?

AZ-photoboothMy sister got married a few weeks ago.  The wedding was at Sunnyside Pavilion in Toronto and was absolutely gorgeous.  My kids especially enjoyed the photo booth at the reception.  I think we have close to 100 sheets of pictures of them.  Great fun!

Last year, I wrote about how changes in your relationship status can affect the amount of tax you pay in Can my love life affect my tax bill?Today, I’d like to take that thought a bit further and discuss how having children will also change your tax situation.  (Sis, I know you’re reading this, and this isn’t a hint or anything.)

Tell Canada Revenue Agency about your kids

When my last child was born 6 years ago, we had to fill out form RC66 – Canada Child Benefits Application.  Now, there is a method available called the Automated Benefits Application.  When you’re registering your child with the province for birth certificate purposes, you may indicate your consent for the information to be shared with the CRA in order for all related benefits to be calculated.  If having government departments share information gives you the eebie-jeebies, you can still use form RC66 if you prefer.

Regardless of the method that you choose, you will need to inform Canada Revenue Agency in order to receive (as a minimum), the Universal Child Care Benefit of $100/month per child under 6.  They will also be looking for documentation for your child when you eventually claim the Amount for children ($2,234 for 2013) on line 367 of your tax return (plus any related Provincial amounts – look at Provincial form 428).

Other benefits tied to income 

Depending on your level of income, you may be eligible for the Canada Child Tax Benefit.  This benefit is calculated automatically when you and your spouse/common-law partner file your income tax returns.  You do not need to submit a separate application.

The number of children that you have impacts the amount of your GST/HST credit.   In order to apply for this credit, you need to check the “yes” box on page 2 of your tax return.

The Working Income Tax Benefit also changes depending on how many children you have.  Complete schedule 6 with your tax return to apply.

If there are any Provincial tax credits where you live, they should appear on provincial form 479.

Income splitting?

Next week, we’ll address how having children could further impact your tax situation if the Conservative Party proposal on income splitting is implemented.

August 11, 2013

3 responses on "Tax breaks for having children?"

  1. Ah all these talk of taxes make my head ache.
    Leslie Trawler recently posted..Jonathan LittleMy Profile

  2. Canada has many tax incentives and options unlike the US. Raising children is expensive. A little amount from the taxes can help a few expenses.

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