Canada Child Benefit (CCB)

The Canada Child Benefit (CCB) is a Non-taxable benefit for children under the age of 18. It 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. Eligibility and payments are based on your tax filing, but you are not required to report this income on your tax return.

CRA Calculator

RESPs (Registered Education Savings Plans)

RESPs help you save for your children’s post-secondary education. Contributions to these plans are NOT tax deductible and NOT reported on your income tax return. However, the income earned within the plan is not taxed until withdrawn, presumably by a child in post-secondary studies who is in a much lower tax bracket than the parent or grandparent who made the contributions.

The federal government will also contribute a grant based on a percentage of your annual contribution. The basic maximum annual grant of $500 is available regardless of family income (assuming annual contributions of $2,500 or more) and additional grants are available to families with lower incomes. The maximum lifetime grant per child is $7,200 and the maximum lifetime contribution to an RESP is $50,000 per child.

Details on how RESPs work and the specifics of the Education Savings Grant program can be found here. Contributions stop when the student reaches the age of 16. Withdrawals can begin once the student has enrolled in post-secondary education at an accredited institution.

Withdrawals will have both taxable and non-taxable portions. The taxable amounts are the income earned in the plan (usually dividends/interest/capital gains) and the grant received. If the student/child is enrolled in a post-secondary program, the income will be taxed in their hands. If the child does not attend post-secondary school, the income will be taxed in the subscriber’s hands (typically the parent or grandparent). In cases where the fund is not fully used – either because there are leftover amounts, or because the child did not attend post-secondary school – it is possible for the subscriber to use the funds for their own education.

Canada Learning Bond

Available to families who are considered low income, whose children were born after January 1, 2004, the Canada Learning Bond (CLB) money will be deposited directly into the child’s RESP. If one does not exist, a child may open their own RESP and be both the subscriber and beneficiary. The beneficiary must be under the age of 21 at the time of application.

If the beneficiary does not pursue post-secondary education, the CLB is returned to the government.

Learn more about saving for your children’s post-secondary education here.

Childcare Expenses

The maximum allowable claim for childcare costs is $8,000 per year per child, for children under the age of 7, and $5,000 for children aged 7 through 16. The maximum allowable claim for a child who is eligible for the disability tax credit is $11,000.

What qualifies as a legitimate childcare 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 centres and nursery schools.
• Payments for after-school programs and activities where the child would otherwise have to be in care.
• Camp day programs: March Break camp, P.D. day camps, etc.
• Camp overnight programs: the amounts that can be claimed for sleepaway programs are limited and are based on the number of weeks attended and age of the child.
• Keep in mind, the deduction is intended to help offset the cost of caring for children, enabling parents to work outside the home. Thus, weekend sports or other classes generally do not qualify.

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 non-refundable federal credit is set at a maximum of $19,066, per child. 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.