As announced in the 2016 Federal Budget, the Canada Child Benefit replaces the CCTB as of July 2016. Learn more here.
Conditions of Eligibility for CCTB
The Canada Child Tax Benefit applies only to dependent children under 18 years of age. To receive the benefit, the children must live with you, and you must be the primary caregiver. The CCTB is paid only to those who meet Canadian citizenship requirements, or certain other residency requirements.
In cases of shared custody, where the child lives with each parent about the same amount of time annually, each parent may apply for the CCTB and each receives 50 percent of the amount they would receive if the child lived with them full-time.
Temporary periods of custody may entitle you to a portion of the CCTB, but only when the period of custody is at least two months long, such as over summer school holidays.
Adjusted Family Net Income
Since the CCTB is for lower-income families, net income is used to establish eligibility. Basic net income is the amount on line 236 of your tax return, and in a two-parent household, the spouses add their amounts together to determine family net income.
“For purposes of CCTB eligibility, net income may be adjusted to enhance eligibility,” says Karen Benke, certified financial planner and senior financial consultant with Investors Group in London, Ontario. “The universal child care benefit, or UCCB, which is paid to all families with children under the age of six, is deducted from family net income.”
Registered disability savings plans, or RDSPs, are not normally tax-deductible. For purposes of CCTB eligibility, however, RDSP contributions also are deducted from the family net income. This adjusted income determines eligibility for the Canada Child Tax Benefit.
The Canada Revenue Agency administers child tax benefits for some provinces and each of the territories, using information on your federal tax return to establish your eligibility for these programs. Payment also is included with your CCTB cheque or direct deposit.
Participating provincial programs include the Alberta family employment tax credit, the British Columbia family bonus, the New Brunswick child tax benefit, the Newfoundland and Labrador child benefit, the Nova Scotia child benefit and the Ontario child benefit. Child benefits for the three territories also is handled by the CRA.
Other provincial child benefit programs do not fall under the purview of the Canada Child Tax Benefit, so you may contact provincial tax offices to determine eligibility for any further child tax credit.
Applying for Canada Child Tax Benefit
Application for the CCTB should occur as soon as possible after your child is born or takes up residence with you, or as soon as you and your spouse meet the eligibility requirements. The CRA considers a CCTB application late if it is submitted 11 months after a change in status, requiring the submission of further proof of eligibility documents.
In provinces and territories that participate in the Automated Benefits Application program, the process begins at the birth of a child when the mother chooses to have birth information sent to the Canada Revenue Agency as part of the program. This automatically starts application for the CCTB as well as the UCCB and any applicable provincial child tax benefit.
Applicants also may use form RC66 or through the “Apply for Child Benefits” online service, available through CRA My Account.
References & Resources
- Karen Benke, CFP; Investors Group; London, Ontario
- Canada Revenue Agency: Canada Child Tax Benefit
- Canada Revenue Agency: CCTB — Application and Eligibility
- Canada Revenue Agency: Shared Custody
- Canada Revenue Agency: Registered Disability Savings Plan
- Canada Revenue Agency: Automated Benefits Application — Questions and Answers
- Canada Revenue Agency: Automated Benefits Application — Participating Provinces and Territories