Area of Law: Tax Law
Answer # 1701
Child benefits and tax creditsRegion: Ontario Answer # 1701
Canada Child Benefit (CCB)
The Canada Child Benefit (CCB) is a federal government tax-free monthly payment made to eligible families to help with the cost of raising children under the age of 18. To receive the CCB, you and your spouse or common-law partner must file an income tax and benefit return every year, even if you have not received income in the year.
The CCB might include the Child Disability Benefit (CDB) and any related provincial and territorial programs.
Who is eligible for the CCB?
To be eligible for the CCB, an individual:
- must live with the child, and the child must be under 18 years of age,
- must be the primary caregiver of the child,
- must be a resident of Canada for tax purposes,
- or their spouse, or common-law partner must be a Canadian citizen, or permanent resident, protected person or temporary resident (as defined in the Immigration and Refugee Act) who has lived in Canada 18 months or more, or an Indian (as defined in the Indian Act).
Although Canada Revenue Agency (CRA) usually considers mothers, or a female guardian to be the ‘person primarily responsible for the child’, fathers, grandparents and other guardians could also be considered to be primarily responsible.
How much will the CCB pay?
CRA calculates the amount of benefit you will receive based on the following:
- the number of children in your care,
- the ages of the children,
- your marital status, and
- your adjusted family net income (AFNI) from 2021
Use the CRA child and family benefits calculator to find out what benefits you may be eligible to receive and how much you may get.
Child Disability Benefit (CDB)
The Child Disability Benefit (CDB) is an additional monthly tax-free benefit included in the CCB to help low-income families who care for children under 18 with mental or physical disabilities.
Child disability payments are based on adjusted family net income (AFNI) from the previous year. Therefore, July 2023 to June 2024 payments are based on income from your 2022 tax return. For the period of July 2023 to June 2024, the annual maximum amount, per child who qualifies, is $3,173 ($264.41 per month). The CDB will be reduced when an adjusted net family income is above $75,737.
To be eligible for the CDB:
- the child must be under age 18,
- you must be eligible for the Canada Child Benefit (CCB),
- you must be eligible for the disability tax credit (DTC), and
- a qualified practitioner must certify (using form: T2201 Disability Tax Credit Certificate) that the child has a severe and prolonged impairment in physical or mental function. A prolonged impairment means the impairment has lasted for a continuous period of at least 12 months.
CRA must approve the certification. For more information on the Child Disability Benefit, visit CRA.
Canada Dental Benefit
The Canada Dental Benefit is a new federal tax benefit created to help lower dental costs for eligible families earning less than $90,000 per year. Parents and guardians who do not have access to a private dental insurance plan who have a child under 12 years old receiving dental care are eligible for the new benefit.
Applications are open until June 30, 2024 for:
- dental care received between July 1, 2023 and June 30, 2024
- one additional payment if you meet the criteria
There is a maximum of 2 payments for each eligible child. For more information, view 1706 Canada Dental Benefit.
Ontario Child Benefit (OCB)
The Ontario Government also offers a program to help reduce child poverty. It is called the Ontario Child Benefit (OCB). This program, administered by Canada Revenue Agency, is for low-income to moderate-income families. If you qualify for this benefit, you will receive payments whether you work or not.
The OCB provides a maximum payment of $1,607 per child per year. The amount you receive depends on your adjusted family net income on your annual income tax return.
The OCB is available to people who:
- are the primary caregiver of a child under the age of 18,
- are Ontario residents,
- have filed a tax return for the previous year (this includes both spouses, whether legally married or common-law), and
- have registered their child for the federal Canada Child Benefit.
Those who qualify for the Ontario Child Benefit will receive their payment as part of the federal CCB monthly payments.
How to apply for child benefits
An application for all federal and provincial child benefit programs (except the Canada Dental Benefit) is made by filing one form with CRA, called the Canada Child Benefits Application.
Parents (or guardians) should apply for child benefits as soon as the child is born, begins living with them, or the applicant becomes a Canadian resident.
Applications can be filed in one of three ways:
- For mothers of a newborn, apply using the Automated Benefits Application to register the birth of your child, and at the same time apply for benefits.
- For individuals with a CRA account, apply online using the Apply for Child Benefits Service in My Account; or
- Download a Canada Child Benefits Application from the CRA website. The completed application must then be sent to your local tax centre (a list of centres is available online and on the back of the application).
CRA will process the application in about three months and determine which federal and provincial programs you qualify for. You will then be sent a CCB notice that will tell you the amount of your payments, if any, and what information the CRA used to calculate the amount.
Ontario child care tax credits
The Ontario government also offers the Ontario Child Care Tax Credit, which focuses on low- and moderate-income families. The tax credit allows parents to claim up-to 75% of their eligible childcare expenses, allowing families to access a broad range of child care options, such as care centres, homes and camps.
The new credit supports families with incomes of up-to $150,000. For information on the latest amounts families could receive visit ontario.ca.
Federal Child Care Expense Deduction (CCED)
To claim the Ontario Child Care Tax Credit, you must be eligible for the federal Child Care Expense Deduction (CCED), created to “provide some relief for taxpayers who incur child care expenses in order to work, carry on a business or undertake certain educational activities” according to Canada Revenue Agency.
For advice and assistance with tax planning, a CRA tax dispute, or other tax issues, contact Tax Chambers LLP
Personal and business tax issues are vast and complicated. To get help, call a lawyer now.
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