What’s New for 2016 Tax Returns:

Children and Families

Ontario has a similar credit worth a maximum of $560 and it is possible to qualify for this credit even if your child doesn’t do sports per se – it’s an activity credit, many other types of programs apply.

Please have receipts – while we do not need them to prepare your return, CRA may ask to see them.

Universal Child Tax Care Benefit (UCCB) AS of July 2016 this benefit has been discontinued.

The UCCB previously paid families a monthly, taxable benefit for any child under the age of 18.
It has now been replaced by the Canada Child Benefit (CCB) which will pay a NON-taxable benefit for children under the age of 18 – but is income tested, meaning only families who fall below the income threshold will qualify. CRA has a handy benefit calculator on their site that can help you determine how much you may be eligible to receive.

http://www.cra-arc.gc.ca/bnfts/clcltr/cfbc-eng.html

RESP’S (Registered Education Savings Plans) – contributions to these plans are NOT tax deductible and NOT reported on your income tax return. The income earned within the plan is not taxed however, until withdrawn, presumably by a university bound child who is in a much lower tax bracket than the parent or grandparent who makes the contributions. The federal government will also provide a grant based on a percentage of your annual contribution (to a maximum contribution of $2500 annually). The basic maximum grant of $500 is available to all contributors and additional grants are available to families with lower incomes. Details on how RESP’s work and the specifics of the grant program can be found here:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/resp-reee/menu-eng.html

Canada Learning Bond

Available to children born after December 31, 2003 whose family receives the national child benefit supplement. This generally means the family net income is under about $50,000 per year. This is a separate and in addition to the RESP – Education Savings Grant.

Learn more about saving for your children’s post-secondary education at:

http://www.canlearn.ca/eng/savings/clb.shtml

Child Care Expenses

The maximum claim for childcare costs is $8,000 per year for children born 2009 or later (i.e. 7 years of age or younger), and $5,000 for children born 1999 through 2008 If your child born any time before 2015 qualifies for the disability tax credit the allowable claim is $15,000.
What qualifies as a legitimate child care expense? Here is a list:

  • Payments to babysitters (including family members if they report the income as taxable) where you have a name and SIN number for the sitter;
  • Payments to daycare centers and nursery schools;
  • Payments for after school programs and activities where the child would otherwise have to be in care such as after school programs;
  • Camp programs: summer camp, March break camp, PD day camps, etc.

Adoption Tax Credit

Parents who have completed the adoption of their children in a tax year are eligible to claim a tax credit based on the costs of adoption. This credit has increased to $15,255 for 2016 and later years. The eligible costs include payments for legal and administrative costs of adopting along with any required counseling or medical expenses and travel costs (if your adoption process involved travel). Keep all receipts and claim all in the year the adoption is finalized.