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.