The life of the Canadian family can be hectic. Between work, school and after-school activities, the day is almost full and there is still a long to-do list. So, where do you find the time to get ready for tax season? Cleo Hamel, senior tax analyst at H&R Block Canada, offers a few helpful tips for Canadian families as the April 30th deadline approaches.
Whether you welcomed a new addition to your family or have a child already in college or university, here are some tips that can help get the most from your return.
For first-time parents
- Let the CRA know: Most hospitals provide the paperwork to register your baby with the Canada Revenue Agency. Registering triggers the Canada Child Tax Benefit, quarterly GST/HST Credit and the monthly Universal Child Care Benefit (UCCB). Both the Canada Child Tax Benefit (CCTB) and GST/HST credits are based on income.
- Child Tax Credit: Families will continue to benefit from a $2,234 Child Tax Credit for each child younger than 18. This will result in a federal tax saving of $335 per child. And if one parent cannot use the entire amount to lower their tax payable, the unused amount can be transferred to a spouse or common-law partner.
- Universal Child Care Benefit: This is available to any family with children younger than six, regardless of the household income. Each eligible child generates the $100 per month benefit. UCCB is taxable in the hands of the lower-income spouse.
- Get a SIN: You won’t be sending your infant off to work any time soon, but it’s important to apply for a social insurance number upon the birth of the child. You will need this in order to open a Registered Education Savings Plan (RESP). Parents can contribute up to $50,000 total, the money grows tax-free and the child can claim the income as a student, when he or she is less likely to be working full time. The maximum Canada Education Savings Grant (CESG) is $500 per year. Taxpayers with income less than $85,414 will also receive a supplement.
- Canada Learning Bond (CLB): To help lower-income families, the government provides $500 in a CLB at birth for children whose families are entitled to the National Child Benefit Supplement. As long as the family is still entitled to the supplement, they will receive an additional $100 CLB each year until the child is 15.
For families with post-secondary and graduate students
- Get credit for textbooks: Post-secondary students can claim $65 for every month they qualify for the education amount. Part-time students can claim $20 per qualifying month. But the credit does not depend on how many textbooks are purchased; it is standard for every student who qualifies.
- Get on the bus: A student who depends on transit to get to campus should keep the passes to claim the Transit Tax Credit, or hand the passes to your parents if you are a dependant, so they can get the tax break. The program also accepts some electronic tickets and weekly passes purchased for four consecutive weeks. You need the receipts and transit passes to back up your claim.
- Get the GST credit: Students turning 19 before April 1, 2015 should file a 2013 tax return even if they had no income. This will allow them to collect the GST/HST credit for the first payment period following their birthday.
- Tuition credits add up: No matter who paid the tuition, the student will receive a T2202A for the amount of tuition paid for 2013. If you do not receive a T2202A, you cannot claim tuition. The form allows you to claim tuition and education amounts as well as the Textbook Tax Credit.
Be sure you don’t miss out on any deductions or credits. If this seems like a challenging task, H&R Block Canada has offices from coast to coast where tax professionals can help with all your tax needs. For those who prefer to take care of their own taxes, H&R Block Tax Software is a secure and reliable program that helps you maximize your tax return. And until March 31, you can file one return using H&R Block Tax Software completely free.
For more information, please visit www.hrblock.ca.