Dwindling the birth rate has dire consequences. With a swelling aged population that zaps pension funds, old people won’t be able to retire from senior positions, making it even harder for young people to advance in their careers. Statistics show that over half of the Canadian graduates between 2010 and now withhold minimum wage jobs that hardly keep up with inflation. And with housing prices going through the roof, who can blame them for postponing marriage or pregnancy? Not to mention how childbirth often takes a toll on women’s mental and physical health, or the medical expenses incurred.
The government of Canada understands that bringing up a child can be emotionally taxing and flatout expensive. To help alleviate the burden for Canadian parents, the CRA offers a gamut of credits and deductions for eligible Canadian families. Here are the benefits you can reap in 2021:
- Canada Child Benefit (CCB)
From Canada, with love. This is a tax-free monthly payment made to all Canadian children under the age of 18 from qualified families. To qualify for CCB, you and your spouse/partner must
- complete and file your annual tax returns
- have total income less than 120k per annum
The amount of CCB payment varies between households, depending on your returns and the age of your child. The amount needs to be recalculated based on the aforementioned factors. Payments are made monthly after-tax filing, from July to the following June.
2. Deduction for the medical expense
All Canadian taxpayers are entitled to claim medical expenses that exceed the lesser of either $2,208 or 3% of your net income. If you, your spouse/partner, or your child incurred medical expenses in 2020, you can claim 15% of the total expenses subtracting the lesser of the two values quoted above, and use it as a credit against the tax you owed.
3. Eligible dependent credit
You must be a single parent to claim this credit. To qualify, you must
- live as a guardian with the child
- not be living with a spouse or partner
4. Child Care Expense
If you hire child care services so you can work, go to school, or run a business, you can deduct the cost on your income tax return. To be eligible for the claim, the child must
- under the age 16 for at least some part of the tax year (unless the child suffer a visible disability)
- Depend on you or your spouse/partner, whose net income does not exceed $12,069.
5. Adoption expense
If you adopt a child, you may claim in the same tax year when the adoption period ends. The maximum amount has been $16,255 since 2019.
6. Canada Worker Benefit (CWB）
This is tax relief for low-income, working for individuals and families. To claim these refundable tax credits, you must
- file your annual tax returns each year
- be a resident of Canada
- be 19 or older when you apply.
7. GST/HST Credits
In addition to CWB, low-income individuals and families may also be eligible for HST credit. To qualify, you and your spouse/partner must
- file annual tax returns each year
- be 19 or older
Payments are made quarterly to eligible individuals and families, and the amounts are recalculated each year based on your return.