Tax rules affecting families can change from year to year, and those changes can affect how much you owe or receive as a refund. This guide summarizes the key family-related tax credits and benefits for the 2014 tax year and explains the notable changes to watch for when filing.
Family Tax Cut
Introduced for the 2014 tax year, the Family Tax Cut helps couples with children under 18 in which one spouse earns significantly more than the other. The higher-earning partner may transfer up to $50,000 of taxable income to the lower-earning partner, which can result in a tax credit of up to $2,000 depending on the income disparity between the spouses. This measure is designed to reduce the family’s overall tax burden when income is unevenly distributed.
» Learn more about the Family Tax Cut
Children’s Fitness Tax Credit
The maximum eligible amount for children’s fitness expenses doubled for 2014, increasing from $500 to $1,000 per child. Parents receive a non-refundable tax credit worth 15% of eligible fitness expenses—meaning the maximum tax reduction is $150 per child. Eligible costs include organized classes and sports registrations. You do not need to submit receipts with your tax return, but you should keep them in case the Canada Revenue Agency requests documentation during an audit.
» Learn more about the Children’s Fitness Tax Credit
Children’s Arts Tax Credit
For 2014, the Children’s Arts Tax Credit continues to allow a claim of up to $500 per child under 16 for ongoing arts and cultural programs. Eligible activities include visual and literary arts, music, performing arts, media, languages, and programs focused on environmental or wilderness education. This credit is separate from the fitness credit, so the same expense cannot be claimed in both categories.
» Learn more about the Children’s Arts Tax Credit
Enhanced Universal Child Care Benefit (UCCB)
Starting January 1, 2015, the Universal Child Care Benefit was increased and restructured. The UCCB is taxable and provides monthly payments to parents as follows:
- Children under six: up to $160 per child per month (up from $100 in 2014), amounting to $1,920 per child annually if you qualify for the maximum.
- Children aged six through 17: a new benefit of $60 per child per month, which totals $720 per child per year.
If you already receive the Canada Child Tax Benefit, you will automatically receive the UCCB as well. Although the increase takes effect at the start of 2015, expect the first adjusted payments to arrive as a lump sum in July 2015, covering the first half of the year; thereafter, payments will be issued monthly.
» Learn more about the Universal Child Care Benefit
Family Caregiver Tax Credit
If you care for a spouse, partner, or another family member with a physical or mental impairment and the dependent relies on you for support, you may be able to claim up to $2,058, which translates to a non-refundable tax credit of up to $309. Eligible dependents generally have little or no income and require substantial care—examples include an elderly parent who lives with you and needs assistance, a child who uses a wheelchair, or an ill spouse. This credit can be claimed in addition to the Eligible Dependent Credit where appropriate, and if the dependent is a child, it can be claimed in addition to the regular child amount.
» Learn more about the Family Caregiver Tax Credit
Eligible Dependent Credit
The Eligible Dependent Credit is intended for individuals who are the sole supporters of a dependent who lived with them throughout the tax year and for whom they have no spouse or common-law partner claiming support. Dependents may include a parent, grandparent, child, grandchild, or sibling (by blood, marriage, common-law partnership, or adoption). For children, grandchildren, or siblings, the dependent must be under 18 or have a mental or physical impairment. Because the rules and exceptions are detailed, review the Canada Revenue Agency’s guidance to determine your eligibility.
» Learn more about the Eligible Dependent Credit
Public Transit Tax Credit
If you, your spouse, or your children under 19 purchased eligible public transit passes in 2014, those costs may be claimed. Qualifying passes include monthly passes and shorter-duration passes that provide unlimited travel for at least 20 days within a 28-day period. For electronic fare cards, claimants must demonstrate the equivalent of 32 one-way trips per month to qualify for the credit. Keep your receipts and passes as evidence when claiming this credit.
» Learn more about the Public Transit Tax Credit
Medical Expenses Credit
A wide range of medical expenses is eligible for tax credits, including certain fertility treatments and prenatal or postnatal care. You can also claim qualifying medical expenses incurred for dependents. Refer to the CRA’s comprehensive list to confirm which items qualify.
» Learn more about the Medical Expenses Credit
Adoption Expenses Credit
If you completed an adoption of a child under 18 in 2014, you may claim up to $15,000 in eligible adoption fees per child. Eligible costs can include fees paid to licensed adoption agencies, court and legal costs, required travel expenses, translation of documents, mandatory government fees, and immigration costs associated with the adoption. The CRA provides details on eligible time periods and specific expenses.
» Learn more about the Adoption Expenses Credit
Child Care Expense Deduction
You can claim child care expenses if you paid someone to look after your child so you could work, run a business, attend school, or perform research under a grant. The maximum amounts you can claim are $7,000 for each child under six, $4,000 for children aged seven to 16, and up to $10,000 for a child with a physical or mental infirmity. Eligible payments include daycare, nursery school, boarding school, day and overnight camps, nanny services, and related care. If you have a spouse or partner, the claim must generally be filed by the person with the lower net income, and the amount claimed cannot exceed two-thirds of that person’s earned income.
» Learn more about the Child Care Expense Deduction
Child Tax Credit
For the 2015 taxation year the Child Tax Credit was replaced by the enhanced Universal Child Care Benefit described above. Note that the Child Tax Credit is distinct from the Canada Child Tax Benefit; while the former changed, the latter continues to be paid to eligible families.
If you want to improve your tax literacy, consider educational resources such as books and courses designed for taxpayers.
This article originally appeared on Today’s Parent.