To help new parents, Service Canada offers maternity and parental benefits. These payments are considered a specific type of Employment Insurance (EI) benefit and are typically reserved for workers who pay EI premiums.
Employment Insurance Maternity and Parental Benefits
Maternity and parental benefits are considered EI payments. In order to qualify, you must have accrued at least 600 hours of insurable employment during the 52 weeks prior to making your claim.
Additionally, to qualify for maternity benefits, you must be pregnant or have recently given birth. If you qualify, you may claim a maximum of 15 weeks of benefits. You may start the benefits up to eight weeks prior to your due date, and you may receive them up to 17 weeks after the birth date.
If you are a surrogate mother or a mother planning to give her child up for adoption, you still qualify for these benefits.
To qualify for parental benefits, you must be caring for a newborn or a newly adopted child. Qualifying individuals may receive up to 35 weeks of benefits. If you are a biological mother who has already claimed 15 weeks of maternity benefits, you may still claim 35 weeks of parental benefits.
Two-parent families may choose to split parental benefits in a way that best suits them. For example, both parents may each take 17.5 weeks, one parent may take all 35 weeks while the other takes nothing, or they may arrange another split. We all have unique tax situations and require a little guidance when there is a big change in our life if you would like to speak with an expert or have TurboTax Live Full Service Experts prepare your return for you which gives you more time to yourself or you can choose to do it yourself with assistance from our LIVE Assist & Review team of experts, click here to learn more.
Applying for Maternity or Parental Benefits
In order to obtain EI maternity and parental benefits, you must apply for them. You can apply online using your Social Insurance Number, address and mother’s maiden name. You will also be required to provide the due date for maternity benefits or the date of birth or adoption for parental benefits. If you want the Service Canada to deposit your benefits directly into your bank account, have your banking information ready. Finally, you need details about any employers you have had over the last 52 weeks.
If you are self-employed, you may apply for EI special benefits if you have registered to access the EI program.
Filing Taxes on Maternity or Parental Benefits
EI benefits are taxable, and Service Canada automatically deducts your federal and provincial or territorial tax from your benefits. If you have received maternity or parental benefits during the past tax year, you will receive a T4E slip detailing benefits received and taxes paid. Unless you specifically request a paper T4E, your information will be available to you only via your online Service Canada account or your CRA My Account.
Take the amount from box 14 – benefits paid – and transfer it to line 119 of your income tax return. This amount is added to the rest of your income, and your deductions are subtracted to calculate your net or taxable income.
The income tax you paid will appear in box 22. This figure is added to box 22 amounts from any other T4 slips and is entered on line 43700 of your tax return. This amount is subtracted from your taxes due.
Which TurboTax Is Best for You?
TurboTax Online can get your T4E, T4 and other slips directly from the CRA using the Auto-Fill My Return service. It can also help you find all the ways you can maximize your refund (or lower your tax bill).
