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On October 30, 2014, Prime Minister Stephen Harper announced new tax relief and enhanced child care benefits for families. The proposed measures introduce the new Family Tax Cut, as well as enhanced Universal Child Care Benefits and an increase to the Child Care Expense Deduction.
The Family Tax Cut
The Family Tax Cut is a new, non-refundable federal tax credit that will allow a higher-income spouse to transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. The credit will provide up to $2,000 per year of tax relief to Canadian-resident couples with children under the age of 18. The Family Tax Cut is effective for the 2014 tax year and families can claim it in the spring of 2015 when they file their 2014 tax returns.
Enhanced Universal Child Care Benefits
The new measures propose that the Universal Child Care Benefit (UCCB) be increased for children under the age of six. As of January 1, 2015, parents will receive a benefit of $160 per month – an increase from the current $100 per month. In a year, parents will receive up to $1,920 per child. Also as of January 1, 2015, the UCCB will expand to include a benefit of $60 per month for children aged six through seventeen. In a year, parents will receive up to $720 per child. Families will begin to receive payments under the enhanced UCCB in July 2015. The July UCCB payment will include up to six months of benefits to cover the period from January through June 2015. The enhanced UCCB will replace the existing Child Tax Credit for 2015 and subsequent taxation years.
The Child Care Expense Deduction
The Child Care Expense Deduction dollar limits will increase by $1,000, effective for the 2015 tax year. The maximum amounts that can be claimed will increase from $7,000 to $8,000 for children under age seven, from $4,000 to $5,000 for children aged seven through sixteen and from $10,000 to $11,000 for children who are eligible for the Disability Tax Credit.
For more details on these tax measures and how they may impact your tax strategy, please contact your MNP Advisor.
Related Topics:Family; Tax Credits
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