If you have children, there are various tax credits and deductions you can claim on your tax return.
Three main tax credits
1. Child Tax Credit
You can claim an amount for each of your children who are under 18 years old at the end of the year. Find out this year’s amount.
If 2 or more families share a home, each eligible parent can claim the credit with respect to their own children. Prior to 2011, only 1 person per “domestic establishment” could claim this tax credit.
2. Children’s fitness amount
You can claim this tax credit if your children are registered in ongoing physical activity activities or classes. You can claim 15% of the fees you pay, up to $500 per child each year. The maximum credit for the children's fitness amount is $75 for each child.
Tip: Learn more about the children’s fitness amount by watching this video from the Canada Revenue Agency.
3. Children’s Arts Tax Credit
You can claim this tax credit if your children are registered in art, music or cultural activities or classes. You can claim up to $500 per child each year. The maximum credit for the Children's Arts Tax Credit is $75 for each child.
Tip: Learn more about the Children’s Arts Tax Credit by watching this video from the Canada Revenue Agency.
Two child benefits
1. Canada Child Tax Benefit (CCTB)
If you have children under age 18, you may qualify for this tax-free monthly payment. The amount of benefits is based on the net family income of the parents. To apply for the CCTB, complete Form RC66 Canada Child Benefits Application.
2. Universal Child Care Benefit (UCCB)
If you have children under age 6, you're eligible to receive $100 a month per child for the UCCB. You automatically apply for the UCCB when you apply for the CTB.
The UCCB is taxable in the hands of the lower-income spouse or common-law partner. If you're a single parent, you can have the UCCB taxed in the hands of your dependent children. This means $180 in tax relief for single parents with 1 child under age 6.
Tip: You don't pay tax on money you receive from the Child Tax Benefit. But you do pay tax on money you receive from the Universal Child Care Benefit. Parents who are separated and share custody of a child can choose to split each of these benefits.
Deductions for child care expenses
You can deduct the costs of having someone look after your children under age 16 (at some time during the year) while you work or go to school. You must have “earned income" to claim deductions for child care expenses.
What you can claim
- Amounts paid to a daycare centre
- Amounts paid to a caregiver – must be a Canadian resident and have a social insurance number, but cannot be the child's father or mother, or a person under age 18 who is related to you
- The portion of school fees that relate to child care services
- The cost of day camps and boarding schools.
How much you can claim
You can claim the lower of:
- 2/3 of your earned income, and
- the actual amount you paid for child care.
The maximum you can claim per child each year is:
- $7,000 for children under age 7
- $4,000 for other eligible children
- $10,000 for children who qualify for the disability tax credit.
The spouse or common-law partner with the lower income must claim the deduction. File Form T778, Child Care Expenses Deduction. Don't include your receipts but keep them as proof of your claim.
Adoption Expense Tax Credit
You can claim an amount for adoption expenses related to adopting a child under the age of 18. The maximum claim for each child is $11,669 in 2013, for tax savings of $1,750.
For adoptions that are finalized in 2013 or later, the adoption tax credit has been enhanced to help offset costs incurred before parents are matched with a child.
Learn more about claiming adoption expenses.
Saving for your child's education with an RESP: Contributions to your child's RESP are not tax deductible, but you won't be taxed on any income earned while the funds remain in the plan. If you save for a child age 17 and under, the federal government and some provincial governments will also put money into the RESP as a grant or bond. Accumulated earnings and government grants are taxable income to the student in the year they are paid out. Contributions can be withdrawn tax free.
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