Are you missing out on significant tax-refunds? According to Turbo Tax, only seven percent of Canadians take advantage of child-care-related tax credits. In fact, some people are missing out on up to $8,000 per year in rebates. To put more money back in your pocket and save thousands every year, here are five tax-refunds that parents can take advantage of in Canada.
Canada Child Benefit (CCTB)
Have you applied for the child benefit program? This tax-free monthly payment is given to families who need help with the cost of raising a child under the age of 18. The maximum annual benefit in 2018 was $6496 per child under the age of 6, and $5,481 per child aged 6 through 17, with the average family receiving around $6,800 in payments annually. Best of all, families do not have to pay taxes on the payments they receive when filing their tax returns.
National Child Benefit (NCB)
This benefit helps to support low-income families and lower the welfare wall by providing child benefits outside of welfare. It’s a supplement to the CCTB and offers extra support for families with children by topping up the monthly payments of the CCTB system.
Child Disability Benefit
If your child is under 18 and has a severe or prolonged physical or mental impairment, you can also apply for the Child Disability Benefit. To be eligible for the disability benefit, you must first qualify for the CCTB, and your child must be eligible for the disability tax credit.
Child-Care Expense Deduction
Parents who hire caregivers or have their kids in nursery schools, childcare services, day camps, overnight camps, or boarding schools, could also apply for this deduction. Taxpayers can claim up to $8,000 per child for children under 7, $5,000 for children aged 7 to 16 years old, $11,000 for disabled, dependent children of any age, and $5,000 for a disabled child over 16 who is not eligible for the disability tax credit. There are, however, limits on the amount you can claim for boarding school and night camps.
Your child’s tuition for post-secondary education in or outside of Canada can be claimed for a return. Residents at least 16 years of age and who are enrolled in an educational institution to obtain skills, or improve their skills in an occupation, are also eligible. Examination fees for licensing or certification may also be eligible for the tuition tax credit.
If you’re unsure whether you qualify for child-related tax benefits, talk to one of our tax advisors to find out how you can maximize your returns. At The Beacon Group of Assante Financial Management Ltd., we help clients with tax planning to increase their personal wealth. To learn more contact us today!