Thank you H&R Block Canada for sponsoring this conversation.
Looking for ways to reduce the amount of taxes you owe? Or better yet, get a bigger refund? New tax credits announced in Canada last year could add up to greater tax savings for your family in the next couple of years.
Caroline Battista from H&R Block Canada highlights five of the new tax credits:
- Enhanced Universal Child Care Benefit: For parents with children under six, the monthly amount for UCCB will increase to $160 (up from $100). New this year, parents with children between six and 17 will now receive $60 a month. The increase for January to June will be paid in a lump sum in July 2015 and the adjusted payments will arrive monthly after that. If you are not already registered for child benefits, you must reapply for the UCCB using form RC66.
- Doubled Children’s Fitness Tax Credit: The Children’s Fitness Tax Credit has doubled allowing you to claim up to $1,000 in expenses for children’s activities such as swimming lessons and soccer. You claim the receipts in the year you paid – not the year the activity takes place and is retroactive for 2014.
- New Family Tax Cut: For families with children under 18, the Family Tax Cut allows couples to save when one spouse earns considerably more than the other. The new tax measure provides a credit equal to the tax savings that would be realized if up to $50,000 of taxable income were transferred from the higher income to the lower income spouse or common-law partner. Here’s how it would work:
Before Family Tax Cut
Spouse 1: Earns $53,953 per year – $10,000 is taxed at 22 per cent
Spouse 2: Earns $20,000 per year
If Spouse 1 transfered $16,976 of income to Spouse 2, their income would be split equally. It would look like this:
After Family Tax Cut
Spouse 1: $36,976 – taxed at 15 per cent
Spouse 2: $36,976 – taxed at 15 per cent
As a result of splitting income, both would be taxable at the rate of 15 per cent, which would result in a difference of $700 in their total tax liability. One spouse can claim a family tax cut for this amount. Keep in mind that the maximum credit is capped at $2,000 and in order to qualify the family must have a child under the age of 18 at the end of the year who normally resides with them throughout the year.
- Increased Child Care Expense Deduction: Starting on the 2015 tax return, the maximum amount that can be deducted for child care expenses will be increased by $1,000 as follows:
- From $7,000 to $8,000 for children under 7;
- From $4,000 to $5,000 for children aged 7 to 16 and infirm children over 16;
- From $10,000 to $11,000 for disabled children.
- Provincial benefits: Nearly every province offers its own benefits so it is important to file your tax return every year so you can qualify. For example, parents on the west coast may qualify for the BC early childhood tax benefit meant to help with the costs of childcare and raising kids. Payments start in April 2015.
If you’re unsure of your eligibility for these new credits or need more information, an H&R Block tax professional can walk you through what’s new for your tax return this year. For more information please visit www.hrblock.ca.
H&R BLOCK GIVEAWAY
H&R Block is giving away ONE gift certificate to one of you! The gift certificate is good for one regular return (T4) that can be used at a retail H&R Block location.
Value: approx. $100!
Giveaway is open to Canada only.
End Date: 2015-02-12 11:59:59 PM
Please note: The gift certificate is for use at any Canadian H&R Block office. It will cover tax filers who have employment income on a T4. They can have other slips such as T5s or T3s as well as RRSP receipts and still be able to use the gift certificate towards their tax preparation. Since self-employed returns are more complex and require more tax professional time, they are not covered under a standard gift certificate. If a person has self-employment income, they are not eligible to use the gift certificate.