New family tax credits for Canadians

As a Canadian resident and tax payer, if you have kids under 18, you’ll probably be impacted by some of the tax changes that take effect this year (for 2014 tax return) and others in 2015. Here’s what’s new:

Children’s fitness amount (2014)

The amount of children’s fitness expenses you may claim for each child has increased from $500 to $1,000. The increased credit is worth $75.

Family tax cut (2014)

This new tax credit (which is frequently referred to as income splitting) is worth up to $2,000 for families where the parents are in different tax brackets. On Wednesday, we’ll have a post dedicated to this new credit and what it might mean for your family.

Child care expense limits (2015)

The maximum deduction limits for child care expenses will increase to:

  • $8,000 (from $7,000) per child under age seven,
  • $5,000 (from $4,000) per child age seven to 16 (and infirm dependent children over age 16), and
  • $11,000 (from $10,000) per child who is eligible for the Disability Tax Credit, regardless of his or her age.

Changes to the UCCB (2015)

The universal child care benefit (UCCB) will increase to:

  • $160 (from $100) per month for each child under six, and
  • $60 (from $0) per month for each child between six and seventeen.

The UCCB is paid out monthly by cheque or direct deposit. While the changes to the UCCB will be effective from January 2015, the first seven months’ difference will be paid out in July 2015. This means:

  • for children under six, you’ll receive $100 per month from January to June, $520 in July, and $160 per month starting in August.
  • for children between six and seventeen, you’ll receive $420 in July and $60 per month starting in August.

These changes to the UCCB will not impact the CCTB (Canada Child Tax Benefit), which is the other monthly payment that some families receive.

Federal amount for children (2015)

The “federal amount for children under 18” (which is a non-refundable credit that you claim when you file your tax return) will be eliminated in 2015. This credit is worth about $338 total in 2014. This credit is sometimes referred to the child tax credit and is not the same as the CCTB.

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