Family Day is not only a time for bonding with loved ones but also an opportunity to reflect on the changes that have occurred at home over the past year, as they may impact your tax situation for tax benefits for families.

Regardless of whether your family has become blended or if things have remained relatively unchanged, there could be benefits available to you, such as the Canada Child Benefit (CCB). Additionally, you might be able to optimize your expenses, qualify for pension splitting, or explore other avenues that could affect how you file your taxes this year. Families, it’s essential to take note of these potential changes and how they may influence your tax return.

Benefits of the Canada Child Benefit (CCB):

The Canada Child Benefit, introduced in 2016, offers significant advantages for eligible families. With a maximum annual benefit of up to $6,765 per child under the age of 6 and up to $5,708 per child between 6-17 years old, families with a net income below $31,711 can receive the full benefit. The benefit gradually phases out for families with higher incomes. Notably, as of 2019, social assistance payments received by kinship care providers are excluded from net income calculations, retroactive to 2010. Discover more about your eligibility for the CCB here!

The Canada Child Benefit (CCB) replaced the Canada Child Tax Benefit in 2016. With the CCB, families can receive a maximum annual benefit of up to $6,765 per child under the age of 6 and up to $5,708 per child between 6-17 years of age. Families with a net income of less than $31,711 are eligible for the maximum benefit, which gradually phases out for higher-income families. Moreover, the exclusion of social assistance payments from kinship care providers’ net income for CCB calculations was made retroactive to 2010.

Combining Expenses for Tax Benefits:

When it comes to charitable donations, spouses have the option to either claim their own donations separately or combine them and have one spouse make the claim. The first $200 of donations is eligible for a 15% credit, while additional donations receive a credit of 29% or 33% based on taxable income level. Generally, it is more advantageous for one spouse to claim all the donations.

Furthermore, spouses can combine medical expenses, allowing the lower-income spouse to claim the total amount. Medical expenses exceeding 3% of net income can be counted towards a tax credit. Gain further insights into how your relationship status can impact your tax scenario here.

Parental Benefits and Flexibility:

For parents, there is additional good news. The supplemental parental sharing benefit provides an extra five weeks of benefits when both parents agree to share parental leave. This initiative offers increased flexibility to families and took effect for children born or placed for adoption after March 17, 2019.

Moreover, the Working While on Claim program has been extended to maternity and sickness benefits. This means that mothers now have greater flexibility in planning their return to work while keeping more of their Employment Insurance (EI) benefits. Under this pilot program, claimants can retain 50 cents of their EI benefits for every dollar they earn, up to a maximum of 90% of their EI benefits.

Make the most of these family benefits and tax strategies to optimize your financial situation! Here’s to learn more about qualifying for the CCB and how your relationship status can impact your tax benefits for families scenario.

Congratulations on the arrival of your little bundle of joy! Life with a new baby can be a bit chaotic, and amidst all the tiny socks and sleepless nights, it’s important to consider how to simplify your taxes may be affected. Here are a few steps you can take now to ensure a smooth tax experience in the future.

Simplify Your Taxes: Making your Tax Benefits for Families easier after having a baby!

Life is suddenly filled with tiny socks, little toques, and sleepless nights. While taxes might not be your top priority, there are a few things you can do now to ensure a smoother tax experience down the road. Here are four ways to make your taxes easier:

Notify the Canada Revenue Agency (CRA) about your baby:

Most hospitals provide the necessary paperwork to register your baby with the CRA. Registering your baby triggers the Canada Child Benefit (CCB), which provides financial assistance for raising a child. Make sure to complete a tax return to receive the CCB based on your income.

Obtain a social insurance number (SIN) for your child:

Even though your baby won’t be entering the workforce anytime soon, it’s important to apply for a SIN as soon as they are born. You’ll need it to open a Registered Education Savings Plan (RESP).

Also read: Tax Credits Unveiled: Leveraging Incentives in Corporate Tax Returns

Open an RESP:

An RESP is an excellent way to save for your child’s education, and the government provides additional incentives. Parents can contribute up to $50,000 over their lifetime, and the government matches a portion of your contributions through the Canada Education Savings Grant (CESG). Your child can use the funds when they pursue post-secondary education.

Check eligibility for the Canada Learning Bond (CLB):

Lower-income families may qualify for the CLB, which provides $500 at birth and an additional $100 per year until the age of 15 for children whose families are entitled to the National Child Benefit Supplement.

Life with a baby brings many changes, but the CRA offers support for new parents. Make sure to take advantage of benefits such as the CCB, RESPs, and potential deductions for childcare expenses. Stay informed and make the most of your new tax situation.