Having a child can be expensive. Luckily, the Canada Revenue Agency (CRA) recognizes the costs involved and offers families a range of credits and deductions.
All Canadian taxpayers can claim medical expenses that exceed the lesser of either $2,397 or three percent of your net income. If you have medical expenses for yourself, your spouse or common-law partner, your child, or the child of your spouse or common-law partner, total all expenses and subtract the lesser of the two values quoted above. Then, multiply that amount by 15 percent. The result is used as a credit against your taxes owed.
The CRA has an Automated Benefits Application that will assist with what you need to apply for after the birth of a child. As well as an Overview of child and family benefits that will provide more information.
Eligible Dependant Amount
If you are a single parent, you may be able to claim the amount for an eligible dependent on line 30400. The maximum claim for this credit for 2020 is $13,229. This is calculated on Schedule 5 – Amounts for Spouse or Common-Law Partner and Dependants. Once calculated it is transferred to line 30500.
Child Care Expenses Deduction
If you incur child care expenses so that you can work, run a business, go to school or do qualifying research, you may claim a child care expenses deduction. If your child is under seven, you may claim up to $8,000, and for 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.
To claim this deduction, keep all of your receipts form your child care provider, and use Form T778, Child Care Expenses Deduction, to help you calculate the amount of your deduction. Transfer the amount from that form to line 21400 of your tax return.