Child Related Benefits, Expenses and Deductions

Written by Richard Ouellette, CPA, CA on Feb. 3, 2015

There’s great news for 2015 for Canadians with children. Stephen Harper has announced a “child care benefit boost” – which includes an increase to, or return of, the monthly Universal Child Care Benefit cheques and an increase to the amount taxpayers can deduct for child care expenses and the child fitness credit.

 

Changes to the UCCB for 2015 – Enhanced Universal child care benefit

The universal child care benefit (UCCB) will increase to:

  • $160 (from $100) per month for each child under six, and
  • $60 (from $0) per month for each child between six and seventeen.

The UCCB is paid out monthly by cheque or direct deposit. While the changes to the UCCB will be effective January 2015, the first seven months’ difference will be paid out in July 2015. This means:

  • for children under six, you’ll receive $100 per month from January to June, $520 in July, and $160 per month starting in August.
  • for children between six and seventeen, you’ll receive $420 in July and $60 per month starting in August.

The enhanced Universal Child Care Benefit (UCCB) is not a pure win for taxpayers as it will replace the existing Child Tax Credit. This credit, which will be eliminated in 2015, is currently based on $2,255 per child which at the 15% credit rate amounts to $338 per child.

Child care expenses

The child care expense deduction, which allows child care expenses to be deducted from income when those expenses are incurred to earn employment or business income or to pursue education, will be increased by $1,000 effective for 2015 as follows:

  • $8,000 (from $7,000) per child under age 7
  • $5,000 (from $4,000) for each child aged 7 through 16 (and for infirm dependent over age 16)
  • $11,000 (from $10,000) for children who are eligible for the Disability Tax Credit

Child fitness tax credit to be doubled and made refundable

This credit was created in 2006 to help with the cost of children’s sports activities. Starting in 2015, the credit will be refundable, which lets low-income families take advantage of the credit. Previously, with a non-refundable credit, parents whose incomes were too low to pay taxes didn’t benefit from the credit but now they will.

The maximum expense that can be claimed will go from $500 to $1,000 per child. Parents can get back up to 15 per cent of their children’s registration or membership fees, a benefit of up to $150. The tax credit applies to children under 16, or under 18 if they’re eligible for the disability amount.

For more detailed information please call KWB at 780-466-6204 or email us by clicking here.

Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.

Richard Ouellette, CPA, CA

Richard Ouellette, CPA, CA

Partner

Richard joined KWB in November 2007. He graduated from the University of Lethbridge in 2003 with a Bachelor of Management. Before joining KWB, Richard articled and worked at a national firm. He successfully wrote the 2005 UFE, and obtained his CA designation in 2006.

On his personal time, Richard enjoys going home to his wife and playing with his two young children. He also enjoys traveling, golfing, biking, working out, and spending time with friends and family.

Richard's Contact Information

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