6 Credits and Deductions for a T1 for a Family With Children

There are many tax credits and deductions available for a family with children, so additional considerations should be given when you file such a tax return.

RC62 Slip

Besides entering slip information into the tax return, you should also consider the following:

  • Reporting it to the return of the spouse with the lower income.
  • Indicating that the income is included in the income of eligible dependent if the taxpayer is a single parent.

Child Care Expenses

Child care expenses provide a significant tax relief for taxpayers. Claims are limited to $5,000, $8,000 or $11,000, depending on the circumstance. You should consider:

  • Any additional expenses incurred and paid for the child that enables the taxpayer or the supporting person to fulfill work and school duties (for example, advertising fees paid to locate a childcare provider might also be qualified).
  • Higher income spouse might be able to claim child care expenses if the lower income supporting spouse goes to school or is ill.
  • Benefits of claiming a child care expenses as a deduction, a refundable child fitness tax credit or a non-refundable children’s arts tax credit. Take into account that such an expense can only be claimed once for the same expenditure made.

Eligible Dependent Amount

With claiming eligible dependent amount, you can benefit up to $1,721 worth of non-refundable tax credit in 2016. Consider claiming eligible dependent amount if you are a single parent, or if your marital status has changed during the year.

Children’s Arts Amount (non-refundable credit) and Children’s Fitness Tax Credit (refundable)

You need to consider the following:

  • Which credit is the taxpayer qualifying for? One of the main differences between claiming an arts amount and a fitness credit is that a qualified fitness program requires a significant amount of time of physical training to a child. However, you can only claim one of the same expense paid for a child.
  • The 2016 Federal Budget reduced the 2016 Children’s Arts Amount Tax Credit from $500 to $250, and eliminated this credit for 2017 and later years.

Tuition Transfer

If you have a child going to a post-secondary schooll or receiving a T2202A slip or TL11, you need to consider that if there are unused tuition credits, such as education and textbook amounts, it can be transferred to the parent(s).

Canada Child Benefit (CCB) and GST/HST Credit

Both CCB and GST are tax-free quarterly payments that help individuals and families with low or modest incomes by providing additional benefits. There are no separate applications required for CCB and GST/HST benefits; however, to receive the benefits, a taxpayer is required to file a T1 return.

ProFile allows you to indicate whether a child is an eligible dependent, automatically calculate who should claim the deduction and credits, automatically have tuition transfer calculated, and calculate of the latest CCB and GST/HST credit.