Prime Minister Stephen Harper announced new tax relief and enhanced child care benefits for families:
1. Introduction of the new Family Tax Cut effective for 2014 and later years
The Family Tax Cut is a new non-refundable tax credit, providing up to $2,000 per year of tax relief to Canadian-resident couples with children under 18. The credit will allow a higher-income spouse to effectively transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. Either spouse may claim the credit.
2. Increase of $1,000 in each of the current child care expense deduction limits effective for 2015 and later years
The maximum dollar limits for the child care deduction are increased to:
$8,000 (from $7,000) per child under 7
$5,000 (from $4,000) per child between 7 and 16 years (and infirm children over 16)
$11,000 (from $10,000) for each child that is eligible for the disability tax credit
3. Introduction of enhanced universal child care benefits to replace the child tax credit effective for 2015 and later years
There are two main changes:
The existing benefit is increased to $160 (from $100) per month for each child under the age of 6
A new benefit is equal to $60 per month for each child from 6 to 17
The enhanced UCCB payment will commence in July 2015 for the period January – June 2015. To qualify parents will have to complete form RC66. The enhanced UCCB payments will be taxable as the existing ones.
4. Doubling of child fitness tax credit from for the 2014 and subsequent years
The maximum amount of expenses that may be claimed under the credit will be doubled from its current limit to $1,000 for the 2014 and subsequent tax years. The credit will also be made refundable effective for the 2015 and subsequent years, increasing benefits to low-income families.