Tax Benefits and Credits Parents Need to Know About
Welcome to tax season. Are you aware of all the benefits and credits you could be applying for on behalf of your family? We know that the information out there can be overwhelming. So we asked the folks at the Canada Revenue Agency (CRA) to share their most essential info for parents and break down the credits and benefits that Canadian families need to know about.
Apply for child benefits
Filing your income tax and benefit return each year ensures you continue receiving certain benefits and credits, such as the Canada child benefit (CCB), a tax-free, monthly payment to help with the costs of raising children under the age of 18, and related provincial and territorial benefits and credits. The CCB replaced the former Canada child tax benefit, national child care supplement, and universal child care benefit. You can apply for the CCB using the Automated Benefits Application for newborns, by choosing the ‘Apply for child benefits’ option in My Account at cra.gc.ca/myaccount or by completing Form RC66, Canada Child Benefits Application. You may also be eligible to receive the goods and services tax/harmonized sales tax (GST/HST) credit, a tax-free, quarterly payment, which may include a payment under related provincial or territorial programs that helps cover the GST or HST that you pay. For more information on these and other benefits and credits that may be available to you, go to cra.gc.ca/benefits.
Let’s face it, sometimes it’s a struggle to pay your bills and put a nutritious meal on the table. Low-income individuals and families who are in the workforce may be able to get further tax relief through the working income tax benefit (WITB). Eligible individuals and families may be able to apply for advance payments. For more information on calculating the amount of your WITB and determining eligibility, go to cra.gc.ca/witb.
Child care
Since you can’t always be home with your child (no one can do it all!), you’ve found a caregiver you trust. You may be able to claim child care costs if you paid for someone to look after your child so you could earn income, carry on a business, go to school, or do research. This may also include payments you made to a day nursery school, daycare centre, boarding school, sports school, day camp, or other camp where lodging is involved. To be eligible, your child must have been under 16 years of age at some time in 2016. However, there is no age limit if the child is dependent on you or your spouse or common-law partner and has a physical or mental impairment. For more information, see Form T778, Child Care Expenses Deduction, which you can find online at cra.gc.ca/forms.
Tax credits for children
Paying for lessons to take your child from backyard rough and tumble to all-star athlete can be costly. Save your receipts to claim the fees you have paid of up to $500 per child under the children’s fitness tax credit. If your child attends programs that contribute to their development, like learning a second language (Bonjour!) or private tutoring to boost that math grade, you may also be able to claim up to $250 in eligible fees per child under the children’s arts tax credit. Two parents can claim the credits for the same child, as long as they do not claim the same fees and the total claim is not more than the maximum allowed.
Whether by choice or circumstance, there’s no debating that raising a child on your own, as a single parent, is hard work. While you cherish every hug, kiss, and ‘I love you,’ the added expenses put stress on your budget. To help with this, you may be able to claim the amount for an eligible dependant. You may also be able to claim a provincial or territorial tax credit for additional funds for you and your family. For more information, go to cra.gc.ca and enter amount for an eligible dependant in the search function.
Completing your tax return
Mark your calendar (as if it isn’t jam-packed already with playdates, appointments, and recitals)—the deadline to file your tax return is April 30. However, since that day is a Sunday this year, the CRA will consider your return as filed on time and your payment to be made if the CRA receives your submission or it is postmarked no later than May 1. Self-employed individuals have until June 15 to file their income tax and benefit returns. But if those individuals have a balance owing, the CRA still has to be paid no later than May 1.
This year you can file online as early as February 20, 2017. Last year, more than 84% of individuals filed their returns online. To file your return online, you have to prepare your return using certified tax preparation software or a certified web application. The CRA has a list of certified tax preparation software on its website, including some that are free. To find out more, go to cra.gc.ca/netfile.
If you are registered with the CRA’s My Account and use certain tax preparation software, you can save valuable family time when you use the CRA’s Auto-fill my return feature. Auto-fill my return makes doing your taxes easier by automatically filling in certain parts of your tax return.
If you have modest income and a simple tax situation, you may be eligible for help filing your return through the Community Volunteer Income Tax Program. As part of this program, community organizations host free volunteer tax clinics across the country. To find a volunteer tax preparation clinic near you, use the MyCRA mobile app at cra.gc.ca/mobileapps or go to cra.gc.ca/volunteer.
Life happens and sometimes family dynamics change as a result of marriage, loss, divorce, or separation. If there has been a change to your marital status, it is easy to update it online through the CRA’s My Account service or the MyCRA or MyBenefits CRA mobile app. You could also send the CRA a completed Form RC65, Marital Status Change (which you can find online at cra.gc.ca/forms) or call 1-800-959-8281. Your family net income is used to calculate your benefits and credits (like the Canada child benefit), so you may see an adjustment to these payment amounts once your marital status changes.
Protect yourself!
As tax season approaches, protect yourself and your family from phishing, as well as fraudulent scams that could lead to identity or financial theft. The CRA will not send an email with a link, ask for personal or financial information of any kind by email or text message (keep these details all in the family), or ask for payments by prepaid credit card. For examples of current scams and for information on how to detect and avoid them, go to cra.gc.ca/fraudprevention. If you receive a call saying you owe money to the CRA, you can check this through My Account. You can also sign up for account alerts in My Account or use the MyCRA mobile app and provide your email address. As a fraud prevention measure, this new service will notify you by email when direct deposit information and home or mailing address has changed, or if mail sent to you by the CRA was returned to the CRA.
With so many options available to guide you during this tax season, there’s no excuse to delay. To get started on your income tax and benefit return, go to cra.gc.ca/getready.
Don’t miss the latest CRA news and tax tips—follow the CRA on Twitter @CanRevAgency.
