Last month ushers in the newest iteration of tax benefits for parents of young children. With the first payments being made on July 20, 2016, the Canada Child Benefit replaces a number of previous tax breaks for families – Canada Child Tax Benefit, the Universal Child Care Benefit, the family tax cut & the children’s fitness and arts tax credits.
What’s the New?
- This new take on tax breaks for parents of young children is purported to increase benefits for low and middle income families, while high income families may see reduced or even eliminated benefit payments.
- The Canada Child Benefit is entirely tax-free, so it will not have to be reported on your income taxes.
- Families could receive up to $6,400 annually per child under seven years old & up to $5,400 annually for every child between seven and 17 years old – with the maximum payment going to families with an annual income under $30,000
- If you were already receiving child benefits under the old tax scheme you are automatically enrolled in the Canada Child Benefits
For more information on the Canada Child Benefit, visit the CRA’s website. Wondering how this tax change will affect you and your family? Contact the tax accountants at Liu & Associates to maximize your tax planning.