You may be missing out on benefits that come from child care expenses

Do you have or are you expecting a new baby? If yes, you are undoubtedly extremely busy. Your life is a whirlwind of planning, shopping, diapers, baby showers, feeding schedules and much more. Thinking about Canadian personal tax credits and preparing your income tax return is probably very low on your list of things to spend your time on. Nevertheless, tax time comes every year, ready or not.

Raising a child from birth to age 18 is an expensive undertaking in Canada. Economists estimate it costs $193,000 to provide the basics. With figures like that, you want to take advantage of every tax credit that the law allows.

The following child tax credits are available to you:

Basic Child Credit

Claim $2234 (for 2013) for each child under the age of 18. You can claim the full amount for the year the child was born.

Child Care Expenses

You may be able to claim child care expenses for children under 16. The expense must have occurred while one or both parents worked at paid employment, attended an educational facility or engaged in activities pertaining to self employment. The child must have lived with the parent at the time the expenses were incurred. Allowable expenses include day care, overnight camps, boarding schools, salary paid to a nanny or caregiver, a fee paid to a nanny agency and more.

Universal Child Care Benefit (UCCB)
For each child under the age of six, you receive a monthly, taxable payment of $100

Child Disability Benefit
Should your child have a documented disability, you may be able to receive child disability benefits.

Miscellaneous Benefits
Various other benefits may apply to you, depending upon your individual situation. For example, you may be able to claim your child’s medical expenses. In this case, you will have to provide receipts for medical expenses and prescription medications. Depending on your circumstances, you may be able to claim a tax credit for your child’s transit passes.

If you have a child attending university or college, you may be able to claim the tuition as an expense when you file your tax return.

Child Fitness Canada Tax Credit

The Government of Canada recognizes the importance of having healthy, fit and active children. However, having your child participate in fitness related activities is not an inexpensive proposition. The Canada Income Tax Act provides a Child Fitness Tax Credit to offset some of the expense.

This credit allows you to claim up to $500 per year, per child, for participation in an eligible fitness program. The credit is to be used for the price of registration or membership in a suitable program. Receipts are required.

To be eligible, the program must contribute to cardio-respiratory endurance, plus at least ONE of the following:

  • muscular strength
  • muscular endurance
  • balance and flexibility

Activities that promote cardio-respiratory endurance include running, jogging, swimming, cross country skiing and many more. The Canada’s Physical Activity Guides for Children and Youth outlines some of the activities that are acceptable. You can order a copy of this guide at the web site.

Criteria for Eligible Programs and Memberships

To be eligible to claim the Canada Child Fitness Tax Credit, a program must run for a time period of eight consecutive weeks with one or more sessions per week, OR over a time period of eight consecutive days.

If your program is not eligible for 100% of the tax credit, you may still be able to claim a prorated amount.

Get in touch with us to discuss your specific situation.

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