Congratulations on your new baby! During this exciting time, taxes are probably the last thing on your mind. Just so you don’t lose precious sleep over tax breaks you may be missing (some of which are time-sensitive!), we’ve rounded up the 9 credits and deductions created to help support your growing family.
- Becoming a new parent can be overwhelming. The Canadian government offers various credits and deductions to help you with the costs of raising your child(ren).
- Check out all the tax credits available to you to max out your tax savings.
- Don’t forget to ask your nanny, daycare and/or nursery school for receipts. You may be able to claim them as childcare expenses.
1. Medical Expenses
Don’t miss out on the often-overlooked medical expense tax credit. Hospital stays, prenatal care with a nurse, or fertility treatments can be claimed as medical expenses to a maximum of $2,421 or 3% of your net income (whichever is less).
In Quebec, where residents are expected to file TWO tax returns (federal and provincial), you can claim additional expenses, such as a $200 credit for eyeglass frames, for yourself and on behalf of your partner and child. For more specifics, visit RQ.
2. The Canada Child Benefit (CCB)
This tax-free monthly payment helps families with the cost of raising children under 18. To qualify, you and your spouse/partner must file your taxes every year, as this is the information the CRA uses to calculate how much you qualify for. The CCB is paid over a 12-month period, starting in July, based on your income tax return from the previous year.
In Quebec, eligible families living with one or more dependent children under the age of 18 receive Family Allowance (Allocation Famille).
3. Child Disability Credit & Disability Amount
If your child is born with, or develops a disability, you may be eligible for an additional credit on your tax return as well as an extra benefit added to your Canada Child Benefit. To set the wheels in motion, your child’s doctor or nurse practitioner should complete this form and forward it to the CRA. If approved, you’ll be eligible to claim the disability amount for your child at tax time. If you already receive CCB payments, an extra amount will be added.
Quebec residents can apply for a provincial credit as outlined in this guide.
4. Child Care Expenses Deduction
Are you required to pay for childcare so you or your spouse can go back to work, run a business, go to school, or conduct research for which a grant was provided? Make sure to get a receipt from your nanny, babysitter, nursery school and/or daycare as you may be able to claim child care expenses.
- If your child is under seven, you may claim up to $8,000.
- For a child between seven and 15, you may claim $5,000.
- If your child qualifies for the disability tax credit, you may deduct up to $11,000.
5. Adoption Expenses
Have you adopted a child under the age of 18? You may be eligible to claim an amount for adoption expenses, but Hurry! The claim can ONLY be made in the tax year when you completed the adoption process. As of tax year 2021, the maximum amount is $16,729.
In Quebec, adoptive parents may claim a provincial adoption credit of up to $10,000 per child.
Some of the eligible adoption expenses you can claim include:
- Fees paid to a licensed adoption agency
- Travel expenses of the child and the adoptive parents
- Document translation fees
6. Eligible Dependent Amount
If you are a single parent, you may be able to claim this amount for a dependent if you met ALL of the following conditions at the same time:
- You didn’t have a spouse or common-law partner or, if you did, you were not living with, supporting, or being supported by them.
- You supported a dependent in 2021.
- You lived with the dependent in a home you maintained. (In other words, you can’t claim this amount if the person was only visiting.)
Plus, the dependant must also have been either:
- Your parent or grandparent by blood, marriage, common-law partnership, or adoption.
- Your child, grandchild, brother, or sister, by blood, marriage, common-law partnership, or adoption under 18 years of age or who had an impairment in physical or mental functions.
The maximum claim for this credit for 2021 is $13,808. To learn more, check out Claiming the Amount for an Eligible Dependant Credit.
7. Canada Caregiver Credit
The Canada Caregiver Credit is a non-refundable tax credit available to Canadians who support a spouse or common-law partner, or a dependent with a physical or mental impairment.
Along with the federal credit, Québec residents who serve as informal caregivers can claim the refundable Tax Credit for Caregivers (Crédit d’impôt pour aidant naturel).
8. Canada Workers Benefit (CWB)
CWB is a refundable tax credit that provides tax relief for low-income individuals/families who are working. To be eligible for the the Canada Workers Benefit, you have to:
- earn no less than $3,000 (The maximum income level is different in each province.)
- be a resident of Canada
- be at least 19 years of age in the tax year
9. GST/HST Credits
The CRA offers GST/HST tax credits to low-income families. To receive this credit, you and your spouse/common-law partner must complete and file your tax returns annually. You may also qualify if you are over 19 and a single parent living with your child. Once approved, payments are made quarterly and re-evaluated each year based on your tax return.
As a very busy new parent, being aware of the tax breaks to which you’re entitled is one thing. Making sure to claim them is another. That’s why TurboTax searches for your credits and deductions automatically. Think of it as our baby gift to you. Happy parenting!