Soccer practice, dance classes, piano lessons, art class – the list of activities available to our kids today is endless. The cost of these extracurricular activities along with all of the other costs involved with children, means raising a family is getting increasingly expensive. Cleo Hamel, senior tax analyst at H&R Block Canada, offers the following tax tips for families who wish to reduce their 2012 tax bill.
Get a SIN: Apply for a social insurance number upon a birth of the child. You will need this in order to open an RESP. It will also be required when your child starts to earn income, even for minor jobs such as babysitting or paper routes. Money earned from this type of employment qualifies for the calculation of an RRSP deduction limit.
Child Tax Benefit: As soon as a child is born, parents should complete Form RC66, Canada Child Tax Benefit Application and send it to the CRA. This form will register their child for the GST/HST Credit and Universal Child Care Benefit (UCCB) as well as the Child Tax Benefit.
Signed up for kinder gym? The Children’s Fitness Amount is a non-refundable credit that is worth up to $500 for children under the age of 16 enrolled in an eligible program of physical activity. Not every program meets the eligibility guidelines so you need to ensure you know the requirements. Make sure you keep your receipts. Children with disabilities will qualify for an advanced credit if they are under 18.
Universal Child Care Benefit: This is available to any family with children under the age of six regardless of the household income. Each child under six is eligible for the $100 per month benefit. UCCB is taxable in the hands of the lower-income spouse.
Claim childcare: Keep all your receipts for childcare expenses. From daycare to nannies, childcare expenses can be claimed by the lower-income spouse. Unfortunately, any unused amount cannot be claimed by the higher-income earner unless there was a period of separation of 90 days or more or the other spouse was in school, prison or the hospital.
Most often, the credits won’t outweigh the return, but every little bit can help make a difference and there are a number of other credits available to families. Make sure you don’t miss out on any of them by using tax preparation software, like H&R Block At Home do-it-yourself software (www.hrblock.ca), which guides Canadians through step-by-step tips to identify every possible deduction or credit, calculates your return as you go, and ensures you get your maximum refund. Not comfortable doing your own taxes? Bring it into an H&R Block office and a tax professional will review your return for free.
- Information provided by H&R Block
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