The cost of raising a child in Canada is estimated to be over $200,000, and since the nuclear family is alive and well in our country, many of us will need to double, maybe even triple, this amount! It’s good to know that the Canadian government does offer us some breaks in terms of various tax breaks and credits. If you’re new to the messy and unpredictable yet oh-so-rewarding world of parenthood, make sure you’re taking advantage of what’s available.
Child Care: You can claim expenses related to hiring a babysitter or sending children to daycare – up to $7,000 for kids under seven and $4,000 if they’re ages seven to 16. The costs are deducted from the income you’ll claim on your tax return.
Summer Camp: If you work or go to school, summer camps, sports programs or after-school activities may quality for the child care tax deduction, but many parents overlook this on their returns. Since you’re not allowed to carry forward unclaimed expenses, you have to claim it or lose it.
Children’s fitness amount: Claim up to $500 for any fees spent on your child’s fitness activities including soccer, hockey or other physical activities. The Canada Revenue Agency explains what qualifies for the children’s fitness credit.
Children’s arts credit: This new credit lets you claim up to $500 for every child under the age of 16 (18 if your child also qualifies for the disability tax credit) as long as the arts program is at least 8 weeks long. So encourage your child to explore their creative side and reap the tax savings. The dollars you save might provide some consolation for enduring clarinet practice.
Canada child tax benefit: Parents receive this non-taxable monthly payment to help with the costs of raising a child. The amount is based on your net income and province of residence. You can realize up to $310 in tax savings for every child under the age of 18 who lives under your roof. Sorry, no credits for those who stick around past 18!
Universal child care benefit: Parents receive $100 a month for every child under six. Everyone qualifies for the UCCB, regardless of whether or not your child is enrolled in child care programs or daycare.
You can calculate the amount of payments you qualify for using the CRA’s child and family benefits calculator.